Financial Analysis Of IKEAA (Furniture Manufacturing Company)

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IKEAA (Furniture Manufacturing Company) was founded in 2000 by President and CEO Teo Shu Xian. Our company is located in Nilai, Malaysia. Besides our company, we have our own factory which is located in Nilai, Malaysia too. It occupies 100,050 square feet for our office and factory. We hire about 500 workers to make sure operations are well-supported. Our company has produced over 3,000 units of high quality furniture per month and delivered them throughout the Malaysia. Every product that made by IKEAA is high quality and innovative since we have 16 years of experience in manufacturing furniture products. We provide a variety type of furniture which includes dining table, sofa, chair, shelf and other. It is proud that our products have been …show more content…

Commonly, CVP Income Statement is for internal users. It is used by managers and stakeholders to analyze the performance of single products or product categories. Costs and expenses in CVP Income Statement are categorized as fixed expenses and variable expenses. It reports contribution margin as an aggregate sum and for each unit basis. It provides more details of the costs and resources needed to produce a certain product or the unit of a product. The main purpose is to show that whether a company is profitable or not over a long period of operation. Therefore, CVP Income Statement offers additional insight of how the net profit or loss to be known. Under traditional costing methods, fixed manufacturing costs are regarding production costs and are incorporated into the cost of goods sold. On the other hand, in the case of a CVP Income Statement, only the variable costs associated with a product are treated as the costs sold. Next, CVP Income Statement has been prepared using the variable costing method because it provides a superior viewpoint of the effect of fixed costs on the net profits on the grounds that the total fixed cost has incorporated into the income statement, however, the traditional income statement variable costing do not distribute fixed costs to product units. Along these lines, the production costs cannot be truly coordinated with

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