CVP and Sensitive analysis of Ntow Poultry farm : Layer Production
Sasu, Daniel (2016)
Seinäjoen ammattikorkeakoulu
2016
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2016062013242
https://urn.fi/URN:NBN:fi:amk-2016062013242
Tiivistelmä
This thesis is written to analyse the cost, volume of activities and profit of Ntow Samuel, a poultry farmer to aid in making some strategic decisions regarding his new business area of raising 1000 poultry birds for eggs. This analysis would enable the enterprise in determining the units to sell to breakeven, How to gain the expected income as well as how to adjust cost structure to meet up with changing budgeted data.
Also the effect of income tax in this analysis is also examined .In doing this, the CVP and sensitivity analysis technique is used in examining these relationships. The three related ways of modelling CVP relationships namely, the equation method, contribution margin and graph methods are varied in these analysis. A simple excel tool is also created for the enterprise to help manage these components of CVP and sensitivity analysis.
The results obtained indicate that the enterprise breaks even at units of 13838 eggs and starts making profit after the third month of egg production. The venture is thus profitable coupled with the final sale of the spent layers.
Also the effect of income tax in this analysis is also examined .In doing this, the CVP and sensitivity analysis technique is used in examining these relationships. The three related ways of modelling CVP relationships namely, the equation method, contribution margin and graph methods are varied in these analysis. A simple excel tool is also created for the enterprise to help manage these components of CVP and sensitivity analysis.
The results obtained indicate that the enterprise breaks even at units of 13838 eggs and starts making profit after the third month of egg production. The venture is thus profitable coupled with the final sale of the spent layers.