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COST PROFIT VOLUME ANALYSIS
Cost profit volume (CVP) analysis is an essential tool for profit planning. It can be explained as - ' a managerial tool showing the relationship among various ingredients of profit planning, that is, cost (fixed and variable), volume and selling price of activity. It presents information regarding-
1. Quantity of production and sales for a target profit level
2. Behavior in relation to volume
3. Amount of profit for a projected sales volume
4. Sensitivity of profits due to variation in output
5. Volume of production or sales, where the business will break even.
Time Rate System - Labour Remuneration It may be a high day rate or a flat time rate. Under flat time rate, all worker is paid for the time spend without considering the vol
Changes in Product Mix A change in product mix in which individual products have different contribution will contain different contribution. Sales ratio will conclude in a cha
importance of marginal costing &standing costing
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CAN I HAVE A QUESTION
All transfer-pricing methods give the similar division operating income. Do you agree? Describe.
Small Steps sells step stools. Their budget information is shown below. selling price: $40 per stool Variable expense:$30 per stool Fixed Expense:$24,000 use the above inform
Partner A (50%) Partner B (50%) sharing profits equally New partner introduced $13,000 total cash including $3000 as goodwill which is raised to its full value. Partner C
Special order pricing - Shorewood Shoes Company makes and sells a variety of leather shoes for children. For its current mix of different models and seizes, the average selling pri
Development and Research Cost Budget These are costs that are discretional in nature such as they are determined on need basis via the managers concerned. Research cost is the
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