Cost-volume-profit analysis- application in a textile company

In today's competitive conditions, one of the most important goals of businesses is to provide sustainable profit and growth. Businesses should develop strategies considering the risks they face in order to ensure sustainability in their activities. In order to minimize the risks that may arise, business managers should determine their position in the market and determine their future sales volume targets, costs and sales prices based on management accounting data. Financial accounting and cost accounting system should be established for strategic management accounting data. This system should be able to calculate the cost behaviors for management accounting as capacity-based fixed and variable. In this context, cost, volume and profit analyzes calculated within the framework of strategic management accounting of companies should be accurately analyzed according to market conditions. In this study, the data belonging to the company that produces and sells X, Y and Z products as subcontractors are used. In order to generate data for cost data management accounting, data from financial accounting were analyzed on a product basis according to current sales mount and price information by using market and capacity information separated as fixed and variable. Then, in order to increase the profit, the sales price, sales quantity and cost data were separated as variable and fixed, and cost, volume and profit analysis was performed on the basis of product. In the production of a single product, Y and Z products are profit and X product is loss. By considering multi-product analysis for X, Y and Z products, cost volume profit analysis was made when machinery was purchased for the alternative of manufacturing in-house for the contact manufacturing company. While the profit margin was 34,66 % in the multi-product analysis in the case of contract manufacturing, it was seen that the profit margin increased to 36,50 % in the vase of machinery purchase. In addition, when the financing cost is over, the business will increase the profitability by getting rid of the monthly cost of 31.250 TL. The case of the company producing only X, Y and Z product with the purchase of machinery was analyzed. According to the results obtained, the highest profit margin was the products X, Z and Y, respectively. Considering some restrictions according to market demand, the most appropriate product mix was made. In case of machine purchase, 600 units of product X and 500 units of product Y were produced in addition to the idle capacity. With the machine purchase alternative, the company has had the opportunity to produce and sell different products. By reducing the prices of X, Y and Z products, the production volume was increased and the profitability rose to 38,06 %. Alternatives in the study were presented to the management. The complexity of production processes can cause companies to make erroneous profit target analyses. In this context, textile companies need to determine the cost data correctly and develop an appropriate system depending on their production processes. This study is important for businesses operating in the textile industry to establish the right cost system and to analyze cost, volume and profit analyzes according to market conditions.