Explain cost-volume-profit analysis and limitations

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Increasing competition - local, regional and/or global - and decreasing profit margins (due largely to competitive product/service pricing) are forcing firms to use more accurate product costing/pricing methods and to implement more sophisticated management accounting practices (MAPs). To succeed, these implementations need to be based on a carefully designed, domain specific, comprehensive (i.e. inclusive of all relevant attributes) functional cost system within the organisation.

Problem a) Explain Cost-Volume-Profit Analysis and its objectives and limitations

Problem b) Discuss the three methods for calculating the break-even point with examples: The equation method, The contribution margin method, The graphical method

Reference no: EM132943685

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