Cvp analysis and computer applications, Managerial Accounting

Assignment Help:

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:

  • How could a 5% increase in the sales price affect operating income?
  • If Fast Food Co. increases its advertising budget by Sh1 million, how many hamburgers must it sell to cover the increase in fixed expenses?
  • iIf the campus bookstore extends its hours, how much additional revenue must it earn to cover the increased operating expense?
  • If variable production costs are reduced by 7%, how many units of product must be sold to earn Sh 200,000 operating profit?

 


Related Discussions:- Cvp analysis and computer applications

Interpratation of variance, INTERPRATATION OF VARIANCE Controllability,...

INTERPRATATION OF VARIANCE Controllability, Materiality and Trend are the interpretation of variance. The point of comparing flexed budget and real figures is to see what corre

Investing surplus cash, The requirement for working capital fluctuates acco...

The requirement for working capital fluctuates according the level of inventory, production, debtors and creditors etc. The working capital needs are not uniform during the year be

Bulk agency factoring, Bulk Agency Factoring : In this category factorin...

Bulk Agency Factoring : In this category factoring is essentially used as a method of financing book debts. In this sort of factoring the client continues to administer credit a

Extra cost decision, Discuss arguably how management accountants should dec...

Discuss arguably how management accountants should decide when are faced with the extra shift decision

Advantages of participatory budgets, Advantages of participatory budgets ...

Advantages of participatory budgets Information from employees most recognizable with each unit’s needs and constraints is included. Knowledge spread amongst numerous lev

Traditional and activity based costing, Explain what is meant by traditiona...

Explain what is meant by traditional costing system. Support with example.

Costs classification, identify and explain the many classification of costs...

identify and explain the many classification of costs for planning, control.performance evaluation and decision making.

Advanced acc, Pike Corporation paid $100,000 for a 10% interest in Salmon C...

Pike Corporation paid $100,000 for a 10% interest in Salmon Corp. on January 1, 2010, when Salmon''s stockholders'' equity consisted of $800,000 of $10 par value common stock and

The value chain and cost analysis, The Value Chain and Cost Analysis The ...

The Value Chain and Cost Analysis The behavior of a firm's costs and its relative cost position stem from the value activities the firm performs in competing in an industry. A me

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