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DEMERITS OF BREAK EVEN POINT
1. It pays no attention to considerations like effect of government policy changes, changes in the marketing environment etc
2. Fixed cost, entire costs cannot be represented as straight lines
3. It is hard to handle advertisement expenditure
4. Semi-variable costs are ignored
5. It ignores economies of scale in production
6. Fixed costs also may alter in the long run
7. Volume of production and volume of sales are for all the time not identical
8. Selling price may or may not be the identical
Direct and Indirect costs Recall such direct costs are costs which can be traced particularly to the end product of the production procedure while indirect costs cannot be so
Question 1 Discuss the various elements of cost Question 2 Explain the various stages involved in the distribution of factory overheads Question 3 Define activity-based
The controller for U.S. Route 66 Truck Parts is comparing traditional overhead allocationwith ABC. After studying both approaches, the controller prepared the following list of fea
Budgetary Planning and Control - Accounting Techniques A budget is a plan of action expressed in monetary terms. Therefore it is a quantified plan of what one intends to do.
Assume B, G and T are in real terms (and in billions of dollars). B t-1 = 1000 G t = 220 T t = 200 i t = .15 π t = . 10 a) Calculate th
advantages and disadvantages of just in time
If a company trades in a building towards a new building and does not recognize a gain or loss (because of code section 1031), will this transaction affect the cash flows statement
Cost Estimation Cost estimation may be defined with 'a study that attempts to predict among costs and the activity level or cost driver that causes those costs. In practical
Ed Mettway was concerned about his firm's ability to acquire the necessary property, plant, and equipment to take advantage of steadily increasing sales. Touring Enterprises, estab
You are provided with the subsequent information relating to Cello Ltd. The accountant is currently preparing the budget for the next three months ending 30 June 2010.
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