Already have an account? Get multiple benefits of using own account!
Login in your account..!
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
How can we draw a break even chart
Under this method the variable cost line is drawn first and then fixed cost line is drawn over and parallel to the variable cost line. The fixed cost line ,so drawn represents the total cost (variable + fixed) at various level of output because it is drawn above the variable cost line this method is useful to the management for decision making because it reveals additional information :
( there is graaf p no c-85)
a) The variable costs are shown directly for various levels of output/sales.
b) Marginal contribution at various levels of sales is indicated clearly by the difference between sales line and variable cost line.
c) It shows the recovery of fixed cost at various levels of production.
A small variation of this of this method is that of showing the various elements of fixed and variable factory overhead cost variable cost for example major cost elements such as direct material cost variable factory overhead cost variable selling overhead and costs.
(there is graaf p no c-86)
This is a method form of a simple break even chart as shown in the first two methods above. Under this method total cost line is not drawn father another line called contribution line is drawn from the origin and this line goes up with the increase in the level of output. The fixed cost line is drawn parallel to the x- axis as in the first method. The sales line is also drawn as usual. in this method the question of intersection of sales line with the total cost line dose not arise because there is no cost line . the break even point is that point where the contribution line crosses the fixed cost line. at this point total contribution is equal to the total fixed cost line dose not arise because there is no cost line. The break even point is that point where contribution line crosses the fixed cost line. The break even point is that point where the contribution arise crosses the fixed cost line. At the contribution is equal to the fixed and hence there is no profit or loss. As the point total contribution increases more than the fixed cost profit shall arise to the organization and as contribution break even chart shows clearly contribution at different levels of activity and indicates that all levels below the break even point are unable to cover the fixed costs.
SIMULATION MODELS Simulation is a method of analyzing a system by experimentally duplicating its behavior. Management accountants can be able to make meaningful inferences conc
Define performance budgeting according U.S. bureau of budget U.S. bureau of budget defines performance budget as one which presents purposes and objectives for which funds are
Decision Making Process Decision making is the process of choosing among alternatives. There are 7 steps that should be followed as shown in figure below: Figure:
How can we draw a break even chart Under this method the variable cost line is drawn first and then fixed cost line is drawn over and parallel to the variable cost line. The fi
Define role of Management Accountant The main role of management accountant is defined below. Planner e.g. budgeting Information provider e.g. operating statement
Alternative performance measures There are various measures that can be used to measure performance of a decentralized company. The major ones are: • Return on Investmen
engineering method of cost estimation
Determine the tyoes of Cost centre Cost centre can be of two kinds: 1. Impersonal cost centre: consisting of a location or item of equipment (or group of these) like machi
Batch size of one Set up time is the amount of time needed to adjust tools and to retool for various product. Long set ups a change over time make the production of batches wit
GRAPHICAL METHOD Graphical methods can be used in games with no saddle points and having pay off m X 2 or 2 X n matrix. The aim is to substitute a much simpler 2 X 2 matrix for
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd