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CONTINUOUS PROBABILITY DISTRIBUTION (USE OF NORMAL DISTRIBUTION)In reality the C-V-P variables might take any values in a continuous range. It could therefore be more appropriate to use a continuous probability distribution such as the normal distribution with an estimated mean and standard deviation. Estimates may be made of the expected sales volume, the expected selling prices, the expected variable cost and the expected fixed costs together with their probabilities.
It would therefore be possible to compute the expected profit and the likelihood that the company would break even or achieve a given target profit.
reasons for favourable or adverse variances i.e. prise usage, mix, yeild
FLEXIBLE BUDGETING Flexible budget may be used in one of two ways: Planning and Control. At the planning stage when budgets are set, to reduce the effect of uncertainty. For ex
Problem From the following balance sheets of Dramas Ltd., compute the trend percentages using 31st December 2005 as the base year. Assets & Liabilities
Types of Costs In short run, costs can be of three general kinds: Fixed Cost: Total fixed costs stay constant as volume differs in the relevant range of production. Fixe
Management Accounting An accounting discipline concerned with the use of financial information. It used to relevant information by managers and other decision makers inside a s
Constraints 1) A constraint of the type ≤ (≥) can be converted to an equation by adding a slack variable to (subtracting a surplus variable form) the left side of the constrain
International transfer pricing Transfer pricing is a perennial issue, within the international tax community (Richard Casna, Accounting and Business, in the year February 1988)
SENSITIVITY ANALYSIS OF EOQ MODEL Sensitivity Analysis is regarded with the manner in which those results of solutions change in response to change in model parameters.
King Manufacturing has four categories of overhead. The four categories and expected overhead costs for each category for next year are as follows: Maintenance
ABC System and service organizations The ABC system has been taken up as applied to a manufacturing organizations with the same efficiency. One basic characteristic of service
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