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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:
Advantage of relevant cost
Find the value of the following: a. If the total assets are Rs. 87,000 and the liabilities are Rs. 47,000, find out the amount of capital. b. If the capital of propriet
Can someone do my case study for managerial accounting including writing a sales report?
Steps involved in ratio analysis The following are the four steps involved in the ratio analysis: 1) selection of relevant data from the financial statement depending upon t
Disadvantages of ratio analysis 1) False results: ratios are based upon the financial statement. In case financial ratio is incorrect or the data upon which ratios are based
Identification of decision packages - Zero base budgeting Each manager should break down his decision unit into smaller decision packages. Top manager may lay down the minimum
Explain variable cost and fixed cost Variable costs: costs that vary almost in the direct proportion to the volume of production are known as variable costs. The examples of
Advantages of standard costing 1) Measuring efficiency: standard costing is a yardstick for measuring efficiency. The comparison of actual costs with standard costs enables t
limitation
Explain the cost According to controllability: Controllable cost: this is a cost which can be inclined by the action of a specified member of an undertaking. The organization
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