Cost-volume relationship utilization, Managerial Accounting

Cost-volume relationship utilization

Cost-volume-profit study is an estimating concept which can be employed in a variety of pricing circumstances. You can employ the cost-volume relationship for:

Computing item price in price analysis: Cost-volume-profit analysis supposes that net cost is composed of fixed and variable elements. This supposition can be employed to elucidate price changes and also cost changes. Since the volume being obtained raises unit costs decline. Since unit costs decline, the vendor can decreases prices and same make the similar profit per unit.

Computing direct costs in pricing new contracts: Quantity differences will frequently affect direct costs -- specifically direct material cost. Direct material needs frequently involve a fixed component for development or production operation set-up. Since that direct cost is spread over a rising volume unit costs must decline.

Computing direct costs in pricing contract changes: How will a rise in contract effort raise contract price? A few costs will raise others will not. The ideas of cost-volume-profit study can be a priceless aid in considering the result of the change on contract price.

Computing indirect costs: The principles of cost-volume-profit study can be employed in indirect cost analysis. Mostly indirect costs are fixed or semi-variable. Since overall volume rises, indirect cost rates usually decline since fixed costs are spread over a raising production volume.

 

Posted Date: 12/5/2012 6:50:09 AM | Location : United States







Related Discussions:- Cost-volume relationship utilization, Assignment Help, Ask Question on Cost-volume relationship utilization, Get Answer, Expert's Help, Cost-volume relationship utilization Discussions

Write discussion on Cost-volume relationship utilization
Your posts are moderated
Related Questions
7 feed from control to planning It is realized these days more than even before that management control is primarily a human activity which should focus on how to help individu

tha accountant''s approach to CVP ANALYSIS HAS BEEN CRITICISED IN THATIT DOES NOT DEAL WITH THE FOLLOWING; CHANGES IN PRODUCT MIX. WHY IS IT SO?

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

Funds produced from operations, throughout an accounting period, raise working capital by an equivalent amount. The two major components of funds generated from operations are depr

question:lease accounting implicit rate unknown,20%incremental rate leaseterm 4 years,find implicit rate using trial and error method.i know nothing about trial and error method in

I WANT TO KNOW THE RULES FOR DOING LIFO AND FIFO

RELEVANT COSTS FOR NON-ROUTINE DECISIONS A relevant cost is a cost that is appropriate to a specific management decision. To be relevant, a cost should be: 1) Future cost

1. A firm's independent auditors have the responsibility to: a. assess the firm's accounting policies. b. ascertain the firm's profit potential. c. uncover all fraudulent


Using one of the companies from DQ 1, describe how inventory planning and accuracy can be defined using the Pareto principle. The company is Target, Inc.