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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:
From the subsequent financial data describe: a) How the airline company has grown-up b) How the company has been capable to earn grater margins at higher levels of sales
Excercise 2-5 Granger products had the following transactions for the just completed month. The company had no beginning inventories. a)$75,000 in raw materials were purchased
Improvement in product design may result in cost reduction illustrated below: 1) Material cost : change in design of the product may result in saving in material cost. Economi
Price sensitivity Nagle has identified nine factors that contribute to price sensitivity and has also presents various methods or techniques to measure it. The factors that con
A purchased product, sold in a retail store, has a normally distributed daily demand, with a mean of 8 units/day and a variance of 4 (units) 2 . Its supply lead time is 6 days and
Schedule of Non-discretionary Data: and tables, in a form that is readable and readily understood. This worksheet is to be used to identify/capture the various non-discretionar
Algebraic method of the break even point The break even point can be computed by the following method: a) Units of sales volume . b) Budget total or in terms of money va
The Ragan Corporation uses a process cost system. The company started March with 2,300 units in Work in Process-Dept. A. During the month 4,000 units were started. At the end of th
Difference between a fixed and flexible budget Fixed budget A fixed budget remains the same irrespective of changed situations. It remains inflexible even if volume of
What is Scientific standards and Variance analysis The important steps of standard costing as described above may be summarized as follows; 1) Scientific standards: stand
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