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Limitations of CVP Analysis
The make use of the basic CVP model is just only relevant to planning and decision-making in an activity range whether the basic cost and revenue behavior suppositions are valid. Outside the relevant range, CVP methods may still be applied so long as the varying or changeable cost and revenue nature patterns are taken as consideration.
Conversely, the limitations o CVP analysis is in fact its assumptions that do not hold outside the relevant range.
Blox ($) Shapez ($) Direct material per unit 10 23 Direct labour per unit 19 32 Manufacturing overhead per unit 7 10 Selling & Admin. expenses per unit 17 31 T
The firm currently uses 50,000 workers to produce 200,000 units of output per day. The daily wage per worker is $80, and the price of the firm’s output is $25. The cost of other va
weekly working hour 48 , hourly wage rate 15$ , price rate per unit 6$ , normal time taken per piece 36 minuets , normal output per week 220 pieces , actual output per week 275 pie
Relationship among Financial Accounting and Cost Accounting The difference among management and cost accounting may be highlighted by using a number of questions namely as;
Material Price Variance (MPV) This may be described as the difference amoung the actual price and the standard price of the materials consumed. MPV = Actual quantity used (S
The following are three independent situations where the reporting entity for which financial statements are being prepared are underlined. Every company has a December 31, 2012 ye
Expenses paid in previous of their use or consumption is termed as prepaid expenses. At the ending of the year, a portion of the payment keeps unconsumed and is treated like an ass
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Factors affect Decision Making These decisions need consideration of factors as like A. The level of market possible to be available in future B. The strategy that compe
Budgeted direct labour cost 75000 hours @ $16 per hour Budgeted manufacturing overhead 80 000 hours @ $17.50 per hour Actual direct labour cost $997 500 Budgeted manufa
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