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o Limiting Factor analysis 1) Identify limiting factor ( total requiremen t > total availability ) Expected demand *limiting factor (like material, labor etc) If availability given material, labor hour and machine hour !han "e calc ulate all and #nd "hich one i l imiting factor (like material and labor etc) $) %ontribution per unit & ale price ' variable cot ariable cot & direct material direct labour variable overhead ) +imiting factor per unit & (given in quetion) ) %ontribution - limiting factor per unit & contribution per unit - limiting factor per unit .) /anking & baed on tep (higher contribution 1t , then $nd then rd ) 0) ptimal product ion plan 2) %alculate total contributi on 3tep $ * tep 0 ya ( book page 45 tep calculation) 5) !otal pro#t & !otal %ontribution ' 6ll #xed cot- period cot) o Cost volume proft analysis %ontribution per unit & ale price per unit 7 variable cot per unit %ontribution mar gin ratio(%-3 ratio) & contribution margin - ale * 188 9reakeven point & contribution & #xed cot ("here no pro#t no lo) 9reak even (ale) (6mount) (revenue) & #xed cot - %-3 ratio 9reak even in (unit) (volume) & : ixed cot - contribution margin per unit 3ale 6mount (revenue) & :ixed cot target pro#t - %-3 ratio 3ale in unit (volume ) & #xed cot target pro#t - contribution margin per unit ;argin of afety If actual ale and budgeted ale both given in quetion chooe actual ale

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