Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Limitation of break even charts
Despite many advantages a break even chart suffers from the following limitations:
1) A break even chart is based upon a number of assumption discussed above which may not hold good under all circumstances. For example fixed costs do not remain constant after a certain level of activity variable costs do not always vary in direct proportion to changes in the volume of output because of the laws of diminishing and increasing returns ; selling prices do not remain the same forever and for all level of output due competition and changes in the general price level; etc.
2) A break even chart provides only a limited information. We have to draw a number of charts to study the effects of changes in the fixed costs variable costs and selling price on the profitability.
3) Break even charts present only cost volume profit relationships but ignore other important consideration such as the amount of capital investment marketing problems and government policies etc.
4) A break even chart does not suggest any action or remedies to the management as a tool of management decisions
5) Moiré often a break even chart presents only a static view of the problem under consideration.
What are the Advantages of cost accounting: 1. Cost accounting as an aid to management: cost accounting helps the management in carrying out of its functions, planning, organ
Determine Cost pool and Cost drivers Cost pool: it is another name given to a cost centre and, therefore an activity cost centre may also be termed as an activity cost pool.
The F–test The significance of the regression results can be tested by using the F- statistics. The F-statistics is a ratio which compares the explained sum of squares and t
Once the credit information is accumulated the subsequent step is to analyze the gathered information and isolate those matters that may need further investigation. The factors whi
Kinematic Pair: A pair is a joint of two elements which permits relative motion. The relative motion among the elements of links that built a pair is needed to be fully constrain
Stine Company uses a job order cost system. On May 1, the company has a balance in Work in Process Inventory of $3,730 and two jobs in process: Job No. 429 $2,150, and Job No. 430
Vogel's Approximation Method (VAM) This method is a heuristic and usually provides a better starting solution than the two methods described above. However, VAM generally yield
Loan Syndication : There are two ways of syndication as: direct lending and through participation. - Direct Lending: regarding "direct lending" all the lenders sign the loa
Stages in the performance budgeting The stages in the performance budgeting is enumerated as follows: 1) Establishment of goals objectives and policies: data collection revi
Select Appropriate Alternative Courses of Action In practice, decision-making includes choosing among competing alternative courses of action and choosing the alternative which
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!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd