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ERIC Number: EJ1096111
Record Type: Journal
Publication Date: 2016
Pages: 14
Abstractor: As Provided
ISSN: ISSN-1942-2504
A Formula for the Units to Satisfy an Operation's Desired Rate of Return in CVP Analysis--A Conceptual Approach
Anderson, Johann A.; Leese, Wallace R.
American Journal of Business Education, v9 n2 p87-100 2016
A common formula presented in many managerial- and cost-accounting textbooks makes possible the determination of the quantity of units which must be produced and sold to generate a desired dollar-amount of operating income. This article addresses the question "What formula can be used to determine the quantity of units needed to yield a desired operating-income level expressed as a rate of return on total operations-costs?" Algebraic and conceptual issues regarding the derivation of such a formula are identified. The desired formula is initially derived via a conceptual approach, which is verified with algebraic solutions afterward. An example problem is given, followed by concluding remarks.
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Publication Type: Journal Articles; Reports - Descriptive
Education Level: N/A
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: N/A
Grant or Contract Numbers: N/A