Integrated Project
Cost-Volume-Profit Analysis on Carvinal Cruise Line
Learning objective: Students will create a multi-product profitability analysis that can be used to determine the effects of changing business conditions on the client’s financial position. Specifically, students will calculate breakeven points, operating income, the weighted average contribution margin, margin of safety, operating leverage, and so forth. Students will be guided to use Excel in such a way that any changes to the assumptions will correctly ripple through the entire profitability analysis, enabling the client to use this spreadsheet model over and over, using different “what if” assumptions. Finally, students will advise the client of three potential changes to the business cost structure. There are several follow my examples in the relevant Chapters in the textbook. Focus on (Chapter 15, pp. 756-787) and 14th Edition on (Chapter 15 Slides).
Click to access Excel folder for an example:
https://sites.google.com/case.edu/excel-for-management-acctg/cvp-analysis
The main components of CVP analysis are: