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Cost-Volume-Profit assumptions
The main assumptions required in C-V-P analysis are:
1) The relationship holds merely within the appropriate range. The relevant range is a band of activity in which a specified cost behavior is stated.2) The behavior of net cost and net revenue has consistently been determined and is lineal in the relevant range.3) All costs can be splitted into fixed and variable such that mixed costs are decomposed into their fixed and their variable components.4) Selling prices are constant hence we avoid quantity discounts.5) Efficiency and production stay similar therefore we ignore the learning curve effect.6) The prices of factors of production stay constant.7) There are no limiting factors
Elimination of non-value added activity JIT manufacturing can be described as a philosophy of management, dedicate to the elimination of waste. Waste is stated as anything whic
State Factors determining Working Capital requirement.
tha accountant''s approach to CVP ANALYSIS HAS BEEN CRITICISED IN THATIT DOES NOT DEAL WITH THE FOLLOWING; CHANGES IN PRODUCT MIX. WHY IS IT SO?
Explain Direct labor cost standard The setting up of standard labor cost for each product would require: a) The determination of budgeted fixed overhead for a period b) B
INTERPRETING THE SIMPLEX TABLEAU We can now see that our attention must be directed to reading, interpreting and analyzing the (simplex) results. It is erroneous, however, to a
companyXYZusesthe job oder costing system.
Change of Technology: Changes in technology commonly leads to improvements in the efficient processing of raw material, reduce in wastages, more speedy production and higher produ
Inventory planning & control under uncertainty The basic EOQ model assumes that all the parameters (elements) in the model are certain (i.e. can be predicted precisely in advan
What does compounding technique shows?
Alma and Associates, a new consulting service, recently received a bill for repairs on its computers totaling $2,350. Alma thinks it may have been overcharged and is trying to recr
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