Cvp analysis and computer applications, Managerial Accounting

CVP ANALYSIS AND COMPUTER APPLICATIONS

The output from a CVP model is only as good as the input. The analysis will include assumptions about sales mix, production efficiency, price loads, total fixed costs, variable costs and selling price per unit.

The CVP equation can be used to develop financial planning programs. These programs quickly calculate the effects of changes in price, costs and volume on an organization’s profits. They result such “what- if” questions as:

  • How could a 5% increase in the sales price affect operating income?
  • If Fast Food Co. increases its advertising budget by Sh1 million, how many hamburgers must it sell to cover the increase in fixed expenses?
  • iIf the campus bookstore extends its hours, how much additional revenue must it earn to cover the increased operating expense?
  • If variable production costs are reduced by 7%, how many units of product must be sold to earn Sh 200,000 operating profit?

 

Posted Date: 12/5/2012 7:35:45 AM | Location : United States







Related Discussions:- Cvp analysis and computer applications, Assignment Help, Ask Question on Cvp analysis and computer applications, Get Answer, Expert's Help, Cvp analysis and computer applications Discussions

Write discussion on Cvp analysis and computer applications
Your posts are moderated
Related Questions
Strategy A business characteristically invests considerable time and money in developing or creating its strategy. Employees, harried with day-to-day tasks, sometimes fail to s

opening stock unit were 8500 and closing stock units were 6750.frofit of 61200 using managerial costing.fixed overhead absorbed rate was 3 pr unit.what is the profit using absorpti


What are the duties of the Public Company Accounting Oversight Board?

identify and briefly describe four trends in macro market environment which influence on the selected industry?

Classification and computation of variances The computation and analysis of variances is the main aim of standard costing. The variance is the difference among the standard pe

State the factors of CVP The three factors of CVP analysis I e cost volume and profit are interconnected and dependent on one another . for example profit depends upon sales se

Ask question #Miwhy is the activity based costing unaccepable for external financial reportnimum 100 words accepted#

what areas can linear programming be applied in managerial accounting?