Analysis of the amount of profit the practice of paper to write network applications _

Papers to write net: Abstract: The amount of the cost benefit analysis of major studies, the relationship between volume and profit, is commonly used in business decision-making and effective tool by volume-profit analysis, can help companies determine the security situation in production and business activities, to acquire all factors, the impact of changes on the level of profit changes, to achieve profit targets for the business to provide ideas and methods, so that control of production and business activities are often under the most favorable state.

Keywords: volume-profit analysis, profit and loss critical point, change analysis, sensitivity analysis

Volume-profit analysis of the main contents include cost behavior analysis, profit and loss profit of critical analysis and impact analysis of changes in various factors and sensitivity analysis following a chemical company to a company, for example, specify the volume-profit analysis in business decision-making practical use.

A company is a multi-species management of the chemical, its production of A products has been low in recent years, the profit level .2010 A product of the profit is only 2244 yuan, the company developed the product in 2011 was $ 50,000 profit targets .2010 A product of the relevant data are as follows: (1A product sales of 374 tons, sales income of 1,331,440 yuan, the average price of 3560 yuan / ton (refer to non-tax price, the same, cost of sales 1,329,196 yuan, profit 2 244 yuan, (2A product of the average unit cost 3554 yuan / ton, including: workers pay 1623 yuan, raw material costs 1366 yuan, fuel and power costs 228 yuan, 82 yuan depreciation, the test fee 78 yuan machine material consumption 87 yuan, other costs 90 yuan, (3A products, annual production capacity of 500 tons.

First, cost behavior analysis
Cost behavior analysis is the premise of this volume-profit analysis products are the cost of cost of state can be divided into fixed and variable costs Fixed cost is the amount of a particular business is not within the scope of changes in business volume, the total within a certain period costs remained relatively stable, while the variable cost refers to the volume of business in a particular range of its total business volume changes in direct proportion with the cost of change [1].

A product with the actual situation of production personnel and equipment housing is fixed, so the "payroll" and "depreciation" cost of the project is divided into two fixed costs, costs of raw materials, fuel and power costs, testing costs, materials consumed four machine cost of the project is divided into variable costs; for "other expenses" cost of the project, its content includes both changes in cost accounting, but also include fixed costs, but the main changes in expenses, there will be "other expenses" as the variable costs of 70%, 30% as fixed costs.

By this division, combined with the known data can be drawn: 2010 A product of the unit variable cost of the amount of 1822 yuan, the total fixed costs (staff salaries + Depreciation + 30% other costs) for 647,768 yuan.

Second, the critical analysis of profit and loss
Critical analysis is the amount of profit and loss analysis of the basic content of interest by the critical analysis of profit and loss, you can determine the product's profit and loss critical point to understand overview of the current production operations.

1 profit and loss to determine the critical point. Breakeven critical point, is equal to the marginal contribution to fixed costs which are neither corporate profits nor losses of the state by volume-profit equation:
Profit = sales volume × price - unit variable cost × sales - fixed costs
That profit is 0, then the breakeven point in sales is the critical point of sales: profit and loss critical point of sales = fixed costs ÷ (sales price - unit variable cost) = 647 768 yuan ÷ (3 560-1 822 yuan / ton = 373 tons , and A the actual product sales in 2010 of only 374 tons, just to reach breakeven point.

(2) margin of safety and security of the marginal rate margin of safety and security can be used to measure the marginal rate of production and operation security. Margin of safety is a critical point of the normal sales of sales of more than the difference between profit and loss, the marginal rate equal to the margin of safety, security and normal sales the ratio of the amount that can be used between different companies and different industries comparison [1].

A margin of safety products in 2010 as: 1331 440-373 × 3 560 = 3 560 (dollars, margin of safety rate: 3 560 ÷ 1 331 440 = 0.27%. Visible A margin of safety and security products, the lower the marginal rates .

Critical analysis of the above profit and loss, Description: A Company A product sales in 2010 less than the breakeven point is only more than 1 ton margin of safety was only 0.27%, according to the safety test, safety margin rate of 10% or less, belong to the "dangerous" level, so the product is currently in production and operation safety of low capacity utilization level is not enough, a loss more likely, therefore, a company should strengthen its sales efforts to increase production capacity of existing production utilization, in order to expand the margin of safety, production and management to enhance security.

Third, the factors affecting the analysis of changes in profit
Change analysis, means the amount of profit each of the factors that influence a change in the quantitative analysis of sales price, unit variable costs, sales and fixed costs are volume-profit analysis of four key factors a company can start from the four key factors take appropriate measures to complete the expected target profit.

1 to reduce fixed costs. A combination of product-related data, the target profit amount of 50,000 yuan into the amount of profit formula is: Fixed costs = expected sales × (sales price - unit variable cost - Target Profit = 374 t × ( 3560-1822 yuan / ton -50 000 yuan = 600,012 yuan.

2010 A product of the actual fixed cost of 647,768 yuan, more than the expected value of 47 756 yuan, ie, if other conditions remain unchanged, to achieve the target profit, fixed costs required to reduce the 47,756 yuan.

A product of the fixed costs mainly by the composition of workers compensation and depreciation charges due to equipment-specific installation, depreciation can not be reduced, so to reduce fixed costs can only be resolved by reducing the salaries of workers from the product's cost structure point of view, workers compensation cost of 1 623 yuan of the total unit cost of 3554 of 46%, the proportion is too large. A company should review the current production line personnel arrangement is reasonable, the existence of redundant personnel, production efficiency is not high, the protection of normal production under the premise of reasonable allocation of the number of production to lower labor costs.

Links to free download http://www.hi138.com 2. To reduce variable costs. Ibid., will target profit into the amount of profit formula, then: the expected unit variable cost = selling price - (target profit + fixed Cost ÷
Volume = 3, 560 yuan - (50 000 +647 768 yuan ÷ 374 = 1 694 yuan 吨
A change in product unit cost in 2010 was 1 822 yuan, 128 yuan more than expected. Namely: in the case of other things being equal, to achieve the target profit, unit variable costs need to reduce 128.

A product of the variable cost mainly by raw material costs and fuel and power costs components. Reduce the cost of raw materials and raw materials consumption per unit purchase price from two aspects. Procurement of raw materials should shop around, bulk procurement of raw materials should be by tender way to improve procurement-related internal control system, in order to reduce the purchase price of raw materials, while the unit consumption of raw materials evaluation system should be established, the unit consumption of raw materials at a reasonable level to reduce the cost of fuel can power a reasonable arrangements for production time, strict control of water, electricity, steam unit consumption, establish and improve fuel power consumption per unit assessment system and other measures to reach.

3. Increase sales price. Ibid., will target profit into the volume-profit equation, we obtain: = unit sales price of expected variable cost + (fixed costs + target profit ÷ sales = 1822 yuan + (50 000 +647 768 yuan ÷ 374
T = 3688 yuan.

A product's price in 2010 was 3560 yuan, 128 yuan lower than expected, ie: other factors constant, to achieve the target profit, selling price need to increase 128.

A market in recent years, manufacturers add more products, the market increasingly competitive, the price increase more difficult. A company can be differentiated from the business point of view, the product so deep and stronger in order to enhance competition in the market force, expanding price increases.

4 to increase production and sales. Ibid., will target profit into the volume-profit equation, we obtain: sales expectations = (target profit + fixed costs ÷ (sales price - unit variable cost = (50 000 +647 768 ÷ (3 560 -1822 = 401 (t.

A product sales in 2010 was 374 tons, 27 tons less than expected, ie: other factors constant, to achieve the target profit, sales need to increase 27 tons, which requires companies to further strengthen its sales efforts to promote profit goals.

5. Adopt comprehensive measures to achieve target profit above provides information on how to take individual measures to achieve target profit approach, but the reality of Economic life, the various factors affecting profit are interrelated, such as to increase sales, you may need to lower the price increase in advertising fees or promotional costs. Therefore, enterprises should take comprehensive measures to achieve the goal of profit, which requires a comprehensive measure, repeated balance.

Fourth, the relationship between the amount of profit sensitivity analysis
The profit and loss analysis and critical analysis of changes, there is a assumption that, in addition to the unknown variables of the other factors remain unchanged, but the fact that, due to raw material prices, product prices, such as changing production and sales, will ensure this point, the target sales and other data along with change. Thus, the need to use sensitivity analysis to determine the impact of various factors on the extent of the size of profits to policy-makers after a change in circumstances, timely and effective response.

Reflect the sensitivity of the indicator is the "sensitivity coefficient": the sensitivity coefficient = percentage change in profit / percentage change in factors [1] The following products of a company A sensitivity coefficient of each factor analysis and calculation:
1 price sensitivity factor, assuming 1% increase in price, the new unit price =
3 560 × (1 +1% = 3 595.60 dollars. Click here to unit prices, the profit is: (3 595.6-1 822 × 374-647 768 = 15 558.4 (element known to the original profit of 2 244 million, its profit the rate of change = (15 558.4-2 244 ÷ 2 244 = 593%, price sensitivity coefficient = 593% ÷ 1% = 593.

From the percentage of view, nearly 600 times the rate of profit with the price changes, price each increase of 1% of corporate profits will increase 593 percent, which shows the impact of price level for greater profits.

2 unit variable costs, fixed costs, sales of sensitive factor. Ibid, to calculate unit variable costs, fixed costs and sales of the sensitivity coefficients were -304, -289 and 290.

Can be seen, price sensitivity factor, followed by the unit variable cost and sales, fixed costs of the sensitivity coefficient minimum. A description of the product, the price is the most effective means to increase profits and lower prices is the biggest threat to the product. A companies in the development of programs should be sensitive to various factors into account the size factor, comprehensive consideration of measure to ensure the maximization of profits.

In summary, through the use of volume-profit analysis, can have on business production and operation of the current comprehensive in-depth analysis, production and management needs to identify areas for improvement, and provide improved ideas and methods, so that enterprises in the face of rapidly changing the market situation, to make rapid and effective response, control of production operations under the most favorable state.


References:
[1] China Association of Certified Public Accountants. Financial cost management [M]. Beijing: China Financial and Economic Publishing House, 2010. Links to free download http://www.hi138.com