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
Quasar Computers are the first all optical notebooks and their profit largely affects the manipulations in cost, price, total revenue and quantity changes. The market analysis show


Ask queThe standard cost of chemical mixture ~ PQ’ is as follows: 40% of material P @ Rs. 400 per kg. 60% of material Q @ Rs. 600 per kg. A standard loss of 10% is normally anticip

Managerial Accounting Before going to Managerial Accounting let us discuss a bit about Financial Accounting. Financial accounting is concerned with reporting to the external pa

Illustration of short-term decisions These are, to a significant extent, determined by the excellence of the firm's long-term decisions. Illustration of short-term decisions in

Cyclic Chains: In Markov Chains the current state of the system depends on all previous states. It is a stochastic process.  Sometimes transition probability matrices are diff

Difference between budgetary control and standard costing Budgetary control The budgets are prepared for the concern as a whole. The budgets are fixed on the basis of p

FOR each of the following cases, indicate why management and the auditors determined that control deficiency was a material weakness. Case1. In our assessment of the effectiveness

Determine the The tools and techniques used in management accounting 1. Financial policy and accounting : every concern has to take a decision about the sources of raising fun

Definition of Linear Programming What is Linear Programming