Conduct Profit Analysis

Week 5 – Assignment: Conduct Profit Analysis

Profit analysis is an analytical technique used primarily to analyze the effects of volume changes on profit. Consider the data in the table below for three independent health services organizations and fill in the missing data indicated by the question marks.

Table 2

Effects of Volume Changes on Profit

Length: 1 completed template provided in the resources for this week.

Here’s the completed table with the missing data filled in:

Explanation:

For organization a:

• Fixed Cost = Total Cost – Total Variable Cost = $2000 – $1400 = $600
• Profit = Revenues – Total Cost = $2000 – $2000 = $400

For organization b:

• Revenues can be calculated by adding Profit to Total Cost: Revenues = Profit + Total Cost = $2400 + $1600 = $4000
• Fixed Cost is given as $600.
• Profit is given as $2400.

For organization c:

• Total Variable Cost can be calculated by subtracting Fixed Cost from Total Cost: Total Variable Cost = Total Cost – Fixed Cost = $4000 – $600 = $3400
• Profit is $0 because Total Revenues equal Total Costs.

Week 5 – Assignment: Conduct Profit Analysis

Profit analysis is an analytical technique used primarily to analyze the effects of volume changes on profit. Consider the data in the table below for three independent health services organizations and fill in the missing data indicated by the question marks.

Table 2

Effects of Volume Changes on Profit

Length: 1 completed template provided in the resources for this week.