C-v-p analysis under uncertainty, Managerial Accounting

Assignment Help:

C-V-P ANALYSIS UNDER UNCERTAINTY

A major limitation of the basic C.V.P analysis is the assumption that the unit variable cost, selling price and the fixed costs are constant and can be predicted with certainty. These factors however are variables with expected values and standard deviations that can be estimated by management.

There are different ways of dealing with uncertainty. Examples comprise:

  • Sensitivity analysis
  • Point estimate of probabilities
  • Continuous probability distribution example, normal distribution
  • Simulation analysis
  • Margin of safety

 


Related Discussions:- C-v-p analysis under uncertainty

Standard costing in modern environment, Standard costing in modern environm...

Standard costing in modern environment Standard costing has traditionally been associated with labor-intensive operations, but it can be applied to capital-intensive production

Full service non recourse, Full Service Non Recourse: in this method the b...

Full Service Non Recourse: in this method the book debts are purchased through the factor assuming 100 percent credit risk. In case of default through the debtor the whole risk is

Assignment, Application of Information technology in respect of management ...

Application of Information technology in respect of management information system

What are the elements of cost, Elements of cost: 1. Material: the sub...

Elements of cost: 1. Material: the substance from which the product is made is known as material it may be in a raw or a manufactured state. It can be direct as well as indir

Determine a firms earnings per share, You have been asked to determine the ...

You have been asked to determine the EPS indifference EBIT* level for your firm using the following information. Under the high-leverage alternative (a D/E ratio of 1.50), the firm

Mortgages, You want to purchase a house that costs $325,000. You have a dow...

You want to purchase a house that costs $325,000. You have a down payment of $65,000 and will take out a mortgage to make up the difference. The AMC Mortgage Corporation offers a q

How will you develop its presentation to appropriate markets, we want to re...

we want to realize our job dreams, we need to think about ourselves as products to be marketed, and in order to do this, we need to contextualize ourselves within the five Ps of ma

What are the disadvantages of budgetary control, What are the Disadvantages...

What are the Disadvantages of budgetary control 1) Uncertain future: the budgets are prepared for the future period. Despite best estimates made for the predictions may not

Strategy, explain strategy asa an organisational process

explain strategy asa an organisational process

Advantages-disadvantages-imposed budgets, Advantages of Imposed budgets ...

Advantages of Imposed budgets Advantages: They increase the probability that the organization strategic plans are incorporated into the planned activities. They

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd