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C-V-P ANALYSIS – MULTIPLE PRODUCTS
The simple product CVP analysis can be extended to handle the more realistic situations where the firm produces more than one product. The objective in such a case is to produce a mix that maximizes total contribution. Total BEP units = Total fixed cost
Average CM
Here:αt is the sales mix of product t.St is the selling price of product tVt is the variable cost of product t.n is the number of units of product t sold BEPt units = αt (Total BEPunits)BEP tsh. = BEPt(units) xSt
A firm wants to buy a new machine and the following quotation has been received. Cost of machine US$100 000 Freight and insurance US$5 000 The new machine will last for five
Advantages and Disadvantages
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Why might managers favour this ABC system instead of the older system that allocated all MOH costs on the basis of direct? labour?
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Variables Unrestricted variable Yi can be expressed in terms of two non-negative variables by using the substitution: Yi = Yi' - Yi'', Yi', Yi'' ≥ 0 The substitution
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