What Is a Profit and Loss Analysis?
The related profit and loss analysis method refers to a method that uses related profit and loss indicators as decision evaluation indicators when making short-term operating decisions. The related profit and loss indicator is a positive indicator that can be used for decision making of more than two schemes.
Related Profit and Loss Analysis
Right!
- Chinese name
- Related Profit and Loss Analysis
- Explanation
- Related profit and loss indicators as decision evaluation indicators
- Application
- enterprise
- Pinyin
- xiangguansuoshiyifenxifa
- The related profit and loss analysis method refers to a method that uses related profit and loss indicators as decision evaluation indicators when making short-term operating decisions. The related profit and loss indicator is a positive indicator that can be used for decision making of more than two schemes.
- This method is suitable for the decision analysis of multiple schemes, and the project with the largest relevant profit and loss is ultimately selected as the optimal scheme. The relevant profit or loss of a scheme is the difference between the relevant income and the relevant difference of the scheme. The relevant profit and loss index is a positive indicator. The judgment criterion for making decisions based on it is: which scheme has the largest relevant profit and loss and which scheme is the best.
- (I) Several important concepts involved in enterprise decision-making [1]
- The biggest advantage of the related profit and loss analysis method is that it is applicable to the decision of two or more mutually exclusive schemes, and generally reflects the calculation and analysis process and steps in a tabular manner, which is more intuitive and clear. This method can be used not only for credit decisions for receivables, but also for cash discount policies and other short-term operating decisions. [2]
- It is known that an enterprise processing the same raw material can simultaneously produce three co-products of A, B, and C, with an annual output of 2,500 kg, 1,500 kg, and 1,000 kg, respectively. A total of 450,000 yuan in joint costs were incurred throughout the year, and the joint costs incurred by each joint product were 225,000 yuan, 135,000 yuan, and 90,000 yuan. Among them, Clink products can be sold directly. The company already has the ability to process 80% of the C-link products into D products and cannot transfer them. For each kilogram of C products processed further, an additional divisible cost of 20 yuan is required. The input-output ratio of Cinglian products and Ding products is 1: 0.7. If the company pays an additional 22,000 yuan in rent each year to buy a piece of equipment, it can make the deep processing capacity reach 100%. The unit prices of the three joint products of A, B, and C are 200 yuan, 210 yuan, and 135 yuan, respectively, and the unit price of D products is 240 yuan. In the planned year, the enterprise can choose from three options: deep processing of all Clinker products into Ding products, deep processing of 80% of Clinker products into Ding products, and direct sales of all Clinker products.
- Claim:
- Determine the relevant business volume, related revenue and related costs of each plan;
- The relevant profit and loss analysis method is used to make a decision on whether C-linked products are further processed into D products.
- solution:
- 1) According to the intent, the plan to further process all C-linked products into D products
- Confirm the relevant business volume of related income is the production and sales volume of Ding product, which is 1,000 × 0.7 = 700 (kg)
- Related income = 240 × 700 = 168,000 (yuan)
- The plan confirms that the cost-relevant business volume of the divisible cost is the production of Clink products, which is 1,000 kg
- Dividable cost = 20 × 1,000 = 20,000 (yuan)
- Exclusive cost of 22,000 yuan
- The plan to further process 80% of Cinglian products into Ding products, and confirm that the relevant business volume of related income includes the production and sales of Ding products and the sales of Ding products directly
- Production and sales volume of Ding products = 1 000 × 0.7 × 80% = 560 (kg)
- Sales of C-link products sold directly = 1,000 × (1-80%) = 200 (kg)
- Related income = 240 × 560 + 135 × 200 = 161,400 (yuan)
- The plan confirms that the cost-relevant business volume of the divisible cost is the production of Clink products, which is 1,000 kg
- Dividable cost = 20 × 1,000 × 80% = 16,000 (yuan)
- The related business volume for the direct sale of all Clinker products is 1,000 kg
- Related income = 135 × 1,000 = 135,000 (yuan)
- Related costs = 0
- 2) The relevant profit and loss analysis table prepared according to the intent is shown in Table 1.
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- Decision conclusion: 80% of the C-link products should be processed into D products and then sold.