Case 1 Bill French Final Paper 
Contents
Case Context 1
Case Background 1
Cost-Volume-Profit Analysis 1
Point of View 1
Problem Statement 1
Areas of Consideration 2
The Breakeven Point 2
Implicit Assumptions and Limitations 2
Per Product versus Aggregate Breakeven Point 2
Change in Volume and Fixed Cost 3
Change in Product Mix and Sales Price 3
The Bonus Dividend Plan 3
Union Demand 4
Change in Product Emphasis 4
Recommendations 5
Revised CVP Income Statement 5
Required Levels of Operation 6
Case Context
Case Background
The case of Bill French is a good illustration to understand the use and limitations of Cost-Volume-Profit (CVP) Analysis. CVP which deals on the relationships of price, costs, volume, and mix of products is a very useful tool for the management to assist them on determining the level of sales, both in number of units and total revenue, which is necessary for the company to cover all its costs using the Breakeven Point Analysis or to achieve a target profit. However, there are assumptions implicit to this approach which could limit the analysis. And these assumptions are the important things Bill French failed to point out when he presented his breakeven analysis on their meeting. Likewise, he also failed to consider the factors and conditions that could alter his analysis, thus he was not able to address right away the concerns raised by the representatives of different departments.
Cost-Volume-Profit Analysis
The approach introduced by Bill French, known as the Cost Volume Profit Analysis, is indeed a valuable tool that could help Duo-Products Corporation's management in estimating the financial effects of a vast array of alternatives/options/scenarios for decision-making. This would help the team see how cost, production volume and profits relate to each other in order to make short-term forecasts, assess the company’s product performances and analyze every decision-making alternative mentioned during the meeting.
The use of CVP analysis will allow the company to determine
Case Context 1
Case Background 1
Cost-Volume-Profit Analysis 1
Point of View 1
Problem Statement 1
Areas of Consideration 2
The Breakeven Point 2
Implicit Assumptions and Limitations 2
Per Product versus Aggregate Breakeven Point 2
Change in Volume and Fixed Cost 3
Change in Product Mix and Sales Price 3
The Bonus Dividend Plan 3
Union Demand 4
Change in Product Emphasis 4
Recommendations 5
Revised CVP Income Statement 5
Required Levels of Operation 6
Case Context
Case Background
The case of Bill French is a good illustration to understand the use and limitations of Cost-Volume-Profit (CVP) Analysis. CVP which deals on the relationships of price, costs, volume, and mix of products is a very useful tool for the management to assist them on determining the level of sales, both in number of units and total revenue, which is necessary for the company to cover all its costs using the Breakeven Point Analysis or to achieve a target profit. However, there are assumptions implicit to this approach which could limit the analysis. And these assumptions are the important things Bill French failed to point out when he presented his breakeven analysis on their meeting. Likewise, he also failed to consider the factors and conditions that could alter his analysis, thus he was not able to address right away the concerns raised by the representatives of different departments.
Cost-Volume-Profit Analysis
The approach introduced by Bill French, known as the Cost Volume Profit Analysis, is indeed a valuable tool that could help Duo-Products Corporation's management in estimating the financial effects of a vast array of alternatives/options/scenarios for decision-making. This would help the team see how cost, production volume and profits relate to each other in order to make short-term forecasts, assess the company’s product performances and analyze every decision-making alternative mentioned during the meeting.
The use of CVP analysis will allow the company to determine