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
Firms need cash to invest in inventory, receivables and fixed assets and to create payments for operating expenses, so as to increase earnings and sales and make sure the smooth ru

State (or select) the dependent variable (Y) Will the CER be employed to estimate price, labor hours, cost, material cost, or some other measure of cost? Will the CER be employ

How costs behave as the level of activity/volume changes.  Why an understanding of cost behaviour is important ? Types Variable e.g. petrol, direct materials Fixed e.g.

Consider the following quality data for three different manufacturers of automobile weather-strips: Weather-strip Bulb Dimension Specification y=20 +or- 4mm

Explain the Features of budgetary control From the definition the following features of budgets control emerge: 1) Establishment of budgets: budgets are prepared for each

I don''t know how to do a variable income statement. Here is my assignment: The Used Books Company is a small online retailer operating out of a garage apartment. The owner buys

Describe the important role that the corporate level strategy has in relation to the development of the business and functional strategy in a multi -business organization

Importance of a budget A Budget is a plan expressed in monetary terms. It is prepared prior to the budget period and may show income, expenses and the capital to be used i.e. a

Explain Ranking of decision packages - zero base budgeting Ranking of decision packages: by ranking the decision packages a company will be able to weed out a lot of marginal e

Contribution margin Analysis Contribution Contribution is the  difference between sales and variable cost or marginal cost of sales . if may also be defined as the excess