Cost-Volume-Profit Analysis as a Short-Term Profit Planning Tool at Bobo Bakery & Café

Abstract

Cost Volume Profit Analysis is a management tool to plan short-term profits for a company. It can help companies determine revenue targets and the amount of costs that must be incurred to achieve profit targets. Some of the analysis components in this study are contribution margin, break even point, margin of safety, operating leverage, shut down point and profit target analysis. The puIDRose of this study was to determine how cost volume profit analysis can be used for short-term profit planning at Bobo Bakery & Cafe. This research uses descriptive analysis method. Based on the results of research on profit planning in 2023, which is known from the cost volume profit analysis, it shows that Bobo Bakery & Cafe is able to cover its fixed costs and make a profit with a contribution margin of IDR3,969,089,908 or 53%, a break-even point of IDR1,553,653,145 if it is able to achieve a sales volume of IDR7,495,314,365 while the margin of safety sales can decrease so as not to cause a loss of IDR5,941,661,220 or 79.27%. Then, the operating leverage shows 1.26. Finally, the shut down point which is at the closing point of Bobo Bakery & Cafe's 2023 profit planning is IDR 1,553,653,145.28, which indicates that Bobo Bakery & Cafe must generate more sales than that amount to finance its cash costs. Bobo Bakery & Cafe must increase sales by IDR7,495,314,365 to get a profit of 60%, or IDR3,145,653,741. The fixed costs are assumed to be constant or unchanged, while the variable costs will increase along with the production costs