C-v-p analysis under uncertainty, Managerial Accounting

C-V-P ANALYSIS UNDER UNCERTAINTY

A major limitation of the basic C.V.P analysis is the assumption that the unit variable cost, selling price and the fixed costs are constant and can be predicted with certainty. These factors however are variables with expected values and standard deviations that can be estimated by management.

There are different ways of dealing with uncertainty. Examples comprise:

  • Sensitivity analysis
  • Point estimate of probabilities
  • Continuous probability distribution example, normal distribution
  • Simulation analysis
  • Margin of safety

 

Posted Date: 12/5/2012 7:20:00 AM | Location : United States







Related Discussions:- C-v-p analysis under uncertainty, Assignment Help, Ask Question on C-v-p analysis under uncertainty, Get Answer, Expert's Help, C-v-p analysis under uncertainty Discussions

Write discussion on C-v-p analysis under uncertainty
Your posts are moderated
Related Questions
what is the computation procedure of accounting rate of return?

What is cvp?

Problem From the following balance sheets of Dramas Ltd., compute the trend percentages using 31st December 2005 as the base year. Assets & Liabilities

Cost Analysis purposes For purposes of cost analysis, the desegregation of the generic value chain into individual value activities should reflect three principles that are not

explain strategy asa an organisational process

Describe the Principles of cost accounting Principles of cost accounting: The fundamental principles of costing are identical and are given below:   1. Cost is related to

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

EOQ Model with quantity discounts Circumstances frequently occur where firms are able to obtain quantity discounts for large purchase orders. Buying in bulkiness has some merit

Intra company transfer pricing A company engaged in production may have several segments division or departments doing production jobs or manufacturing party or fully finished

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