An application of activity-based costing to analyze Cost-Volume-Profit for several items
Keywords:
Activity bBased Costing (ABC), Cost Volume Profit Relationships (CVP), Profit planningAbstract
There are 3 purposes for the study of an application of activity-based costing to analyze Cost-Volume-Profit for several items 1. estimate the product cost 2. analyze the relationship between cost volume and profit (CVP) 3. As a guideline for profit planning the study indicated that the costs of four types of products increased by 5.86 – 40.98 percent while the unit cost of 2 types of products decreased by 6.42 – 7.70 percent compared to the traditional cost system. When applying the results of the study of activity-based costing with the analysis of the relationship between cost volume and profit were based on a measure of the level of cost fluctuation affecting volume and in turn business profit. It was found that with a given fixed cost of 7,625,416.00 baht, resulting in sales at the desired profit of 5,000,000 baht, equal to 22,624,475.87 baht, while variable cost was given to be 9,999,059.87 baht per year. In conclusion, the findings would be useful for the management in the operation planning, profit planning, improvement of production efficiency, and management of costs in the future.
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