CPAnet Forum: CVP Please Help!

Active Topics

Memberlist

Help

BEC STUDY GROUP
CPAnet Forum : BEC STUDY GROUP

Topic: CVP Please Help! (

Topic Closed)

Author

Message

<< Prev Topic | Next Topic >>

Insightful
Regular
Regular

Joined: 18 Oct 2004
Location: United States
Online Status: Offline
Posts: 171

Posted: 17 Feb 2010 at 12:30 \| IP Logged

Need help opinion on CVP analysis.

From a theatrical standpoint I understand the concepts; however given MC I get confused on where to put what.

There is no problem in particular I need help on, what I need to understand is what form this formula comes in SP=VC+FC+NI I can solve for the missing variable.

Most of the problems I have worked seem like a good understanding of algebra is needed, please correct me.

Another question, who does the variable costing income statement help with solving CVP?

Thanks for all input. Exam on 2/25/2010 I need to know this cold.

__________________
Audit 08/17/08 R 9/18/08 80
FAR 8/28/08 R 9/23/08 62, 2/26/09-92
BEC- Retake 02-25 BEC Rec'd 3/19/ 86
REG/ 11/23/2009 75

EAK5455
Regular
Regular

Joined: 08 Jan 2010
Location: United States
Online Status: Offline
Posts: 107

Posted: 17 Feb 2010 at 12:55 \| IP Logged

The basic formula is as follows:

R - VC - FC = NI

R = Revenue
VC = Variable cost
FC = Fixed cost
NI = Net Income

Variable costing is very important for CVP because variable costing focuses on contribution margin whereas absorption costing focuses
on operating income.

__________________
REG-01/26/10- 96
BEC-02/25/10- 83
AUD-5/30/10- 82
FAR-08/02/10-91
Kansas board

Ethics 100%

Insightful
Regular
Regular

Joined: 18 Oct 2004
Location: United States
Online Status: Offline
Posts: 171

Posted: 17 Feb 2010 at 13:46 \| IP Logged

Yes thanks I know the format as you state again is finding the variable given a MC.

__________________
Audit 08/17/08 R 9/18/08 80
FAR 8/28/08 R 9/23/08 62, 2/26/09-92
BEC- Retake 02-25 BEC Rec'd 3/19/ 86
REG/ 11/23/2009 75

mits07
Regular
Regular

Joined: 22 Jan 2010
Location: United States
Online Status: Offline
Posts: 115

Posted: 17 Feb 2010 at 19:55 \| IP Logged

Insightful....I am taking BEC next week as well. What I learned is that, you use the formula Sales=VC + FC + NI Before tax when they give ask for BE units or BE sales. Its often used when the question says, to gain after-tax profit of xxxx or net income before tax of xxxx or target profit of xxxx. If you go back to BE questions, you will see what i am talking a about. Let me know if it makes sense.

Insightful
Regular
Regular

Joined: 18 Oct 2004
Location: United States
Online Status: Offline
Posts: 171

Posted: 18 Feb 2010 at 09:49 \| IP Logged

I understand the mechanics of CVP is the variations that are challenging. Here is a link I google with indepth cost what do you think. I beleive its to this degree we need understanding to work the CPA mcq.

http://www.docstoc.com/docs/15780211/Cost-Volume-Profit-Anal ysis

__________________
Audit 08/17/08 R 9/18/08 80
FAR 8/28/08 R 9/23/08 62, 2/26/09-92
BEC- Retake 02-25 BEC Rec'd 3/19/ 86
REG/ 11/23/2009 75

Sorry, you can NOT post a reply.
This topic is closed.

Printable version

You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot delete your posts in this forum
You cannot edit your posts in this forum
You cannot create polls in this forum
You cannot vote in polls in this forum