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Illustration of Marginal profit To illustrate the computations, suppose that the marginal profit or XE in our model is changed from 3 to 3 + δ1, where δ represents either posit
Analysis of Financial Ratios: Ratios are computed to find out the customer's liquidity position and capability to repay debts. The computed ratios must be compared along with the
C-V-P ANALYSIS UNDER UNCERTAINTY A major limitation of the basic C.V.P analysis is the assumption that the unit variable cost, selling price and the fixed costs are constant an
Elements of cost: 1. Material: the substance from which the product is made is known as material it may be in a raw or a manufactured state. It can be direct as well as indir
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
Input or exogenous variables These are variables of two types: 1) Controlled variables: These are variables that can be controlled by management. By changing the input
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:
Explain the Break-Even Analysis The study of cost volume profit analysis is often referred to as break-even analysis and the two terms are used interchangeably by many. This i
Discretionary fixed costs and Semi variable costs Discretionary fixed costs are those which are incurred as a result of management discretion. These costs have two importan
Explain about Office and administrative expenses These expenses are not related to factory but they pertain to the management and administration of the business. Such expenses
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