What do you understand by marging of safety, Managerial Accounting

Assignment Help:

Question:

(a) A retail store wants to evaluate how many units it must sell in order to earn a profit of Rs 10000 per month if the price of the unit is Rs 300, the average variable cost is Rs 100, and the fixed costs are Rs 5000 per month. If the store prices the unit at Rs 350, would that make a difference? On the other hand, if the price is Rs 350 and the variable costs fall to Rs 85 would that make a difference?

(b) What do you understand by ‘Marging of Safety'?

(c) Describe how the determination of the Break Even Point can help for planning purposes.


Related Discussions:- What do you understand by marging of safety

What is ratio analysis, Ratio analysis A ratio is a simple arithmetical...

Ratio analysis A ratio is a simple arithmetical expression of the relationship of one number to another. It may be explained as the indicated quotient of two mathematical ex

Budget, advantage and disadvantage of incremental budget

advantage and disadvantage of incremental budget

Strategies in working capital management, No further banks were the sole so...

No further banks were the sole source of funds for working capital requires of the business sector. At current more finance options are obtainable to a Finance Manager to allow smo

Cost, What are the limation of semi variable cost and how to overcome it?

What are the limation of semi variable cost and how to overcome it?

The role of computers in simulation, The Role of Computers in Simulation ...

The Role of Computers in Simulation Computers can be used to: 1) To generate the random numbers 2) To simulate thousands of trials. This is done extremely fast, accuratel

Explain the quick ratio - liquidity ratios, Quick ratio Meaning: this...

Quick ratio Meaning: this ratio establishes a relationship among quick assets and current liabilities Objective: the objective of commuting this ratio is to calculate th

Activity ratio, Accounting ratios that determine a firm's ability to conver...

Accounting ratios that determine a firm's ability to convert various accounts within their balance sheets into sales or cash. Companies will usually try to shift their productio

Game theory, Game Theory Game theory was developed for the purpose of a...

Game Theory Game theory was developed for the purpose of analyzing competitive situation involving conflicting interests. In game theory, there are assumed to be two or more pe

Monitoring receivables, A firm requires continuously monitoring and control...

A firm requires continuously monitoring and controlling its receivables to make sure that the dues are paid on the due date and no dues stay outstanding for a long period of time.

Implementation of abc analysis, Implementation of ABC analysis The foll...

Implementation of ABC analysis The following steps are included in implementing the ABC analysis: 1. Categorize the items of inventories, establishing the expected use in un

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