Marginal profit or cost, Managerial Accounting

Maximum change in marginal Profit or Cost

Just as we did in studying the permissible ranges for changes in resources, we are also interested in studying the permissible ranges for changes in marginal profits (or costs). We have seen graphically that the objective function coefficients can change within limits without affecting the optimum values of the variables (the optimum value of Z will change, though).

In the present situation, as in the case of resource changes, the objective equation is never used as a pivot equation. Thus, any changes in the coefficients of the objective function will affect only the objective equation in the optimum tableau. This means that such changes can have the effect of making the solution non-optimal. Our goal is to determine the range of variation for the object coefficients (one at a time) for which the current optimum (solution) remains unchanged.

Posted Date: 12/7/2012 6:50:24 AM | Location : United States

Related Discussions:- Marginal profit or cost, Assignment Help, Ask Question on Marginal profit or cost, Get Answer, Expert's Help, Marginal profit or cost Discussions

Write discussion on Marginal profit or cost
Your posts are moderated
Related Questions
Question 1: a. Distinguish between Advertising and Public Relation? b. Discuss the methods adopted by a Public Relation company in promoting the image of a destination in th

Determine the Profitability ratios in relation to investment a) Return on capital employed/ return on investment b) Return on equity or return on equity share holders' funds

Proprietary ratio/ equity ratio  Meaning: the ratio measures a relationship among proprietor's funds and the total assets. Objective: the objective of computing this ra

Assigning Costs and Assets After identifying its value chain, a firm must assign operating activity and assets to value activities. Operating costs must be assigned to the act

Advantages of zero base budgeting 1) it provides a basis for evaluating decision packages on the basis of benefit considerations 2) it reduces inefficiency and achieves high

Positioning An essential part of the planning process is positioning the organization to attain its goals. Positioning is a wide concept and depends on gathering and evaluating

POINT ESTIMATE OF PROBABILITIES This approach requires a number of different values for each of the uncertain variables to be selected. These might be values that are reasonabl

Sean Corp. issued a $60,000, 10 year bond at the face rate of 8% annually on 1/1/X0. The market rate was 10%. How much cash will the bond investors receive at the end of the first

What is traditional costing In traditional costing overheads are first related to cost centers (production and service centres) and then to cost object, i.e. production. ABC o

Determine the Price determination process 1) Estimating the demand for the product: the first step in determining the price of a new product is to estimation the anticipated