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CVP ANALYSIS AND COMPUTER APPLICATIONS
The output from a CVP model is only as good as the input. The analysis will include assumptions about sales mix, production efficiency, price loads, total fixed costs, variable costs and selling price per unit.
The CVP equation can be used to develop financial planning programs. These programs quickly calculate the effects of changes in price, costs and volume on an organization’s profits. They result such “what- if” questions as:
Decision Making Environment There are four main environments within that decisions can be done. These are: • Certainty • Risk • Fundamental uncertainty • Compet
Explain the Ratio analysis according to kosher A ratio is the relation of the amount a to another b expressed as the ratio of a to b; a: b (a is to b) or a as simple fraction i
The assignment model Consider the situation of assigning m jobs (or workers) to n machines. A job i(= 1,2,3 ...m) when assigned to machine j(= 1,2,3 ...n) acquires a cost Cij.
Interpretation of equity ratio As equity ratio show the relationship of owner funds to total assets higher the ratio or the share of the shareholders in the total capital of th
Disadvantages of the cost accounting: 1. It is unnecessary: it is argued that maintenance of the cost records is not necessary and involves duplication of work. It is based o
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Steps in Strategic Cost Analysis 1) Recognize the suitable value chain and allocate costs and assets to it. 2) Identify the cost drivers of each value activity and how they int
After determining the amount of working capital as in above, a specific amount say 5 percent or 10 percent may be added to cover contingencies. This is to be noted that facts depen
What is Programmer budgeting It is a combination of programming and systems refers to the activity and system analysis refers to cost benefit analysis or operations research. I
what is the role of accounting standard board?
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