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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:
POINT ESTIMATE OF PROBABILITIES This approach requires a number of different values for each of the uncertain variables to be selected. These might be values that are reasonabl
1. If the marginal cost of producing a good is increasing as a firm produces more of the good, then which of the following must be true? a. AFC is rising b. AVC i
QUESTION: PART A One of the divisions within Acme Manufacturing company is presently negotiating with another supplier regarding outsourcing component A that it manufac
Advantage of relevant cost
Explain Programmer budgeting According to burkhead According to burkhead a program budget serves a different purpose than performance budget. A performance budget is useful fo
How can we draw a break even chart Under this method the variable cost line is drawn first and then fixed cost line is drawn over and parallel to the variable cost line. The fi
Cretin Enterprises uses a predetermined overhead rate of $21.40 per direct labor-hour. This predetermined rate was based on a cost formula that estimated $171,200 of total manufact
Advantages and Limitations of Dynamic Programming Advantages: (1) In certain types of problems such as inventory control management, Chemical Engineering design, dynamic
C-V-P ANALYSIS – MULTIPLE PRODUCTS The simple product CVP analysis can be extended to handle the more realistic situations where the firm produces more than one product. The o
Prepare cash budget?
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