Cost-volume-profit assumptions, Managerial Accounting

Assignment Help:

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


Related Discussions:- Cost-volume-profit assumptions

Long run shutdown point, what are the factors should be considered before ...

what are the factors should be considered before terminated the operation of a losing firm??

Accounting exam, hello do your staff help with exams ?

hello do your staff help with exams ?

Explain the break even point pricing, Break even point or B.E.P. pricing me...

Break even point or B.E.P. pricing method : Break even point is the volume of sales at which the total sale revenue of the product is equal to its total cost. In other words, it

Explain the concepts of costs, Explain the concepts of costs. A cost ac...

Explain the concepts of costs. A cost accountant is mainly concerned with the following cost concepts. 1. Concept of objectives: it is this concept that gives direction to

Explain the features of budgetary control, Explain the Features of budgetar...

Explain the Features of budgetary control From the definition the following features of budgets control emerge: 1) Establishment of budgets: budgets are prepared for each

Compute the operating cycle, Under this method, approximation is made of pa...

Under this method, approximation is made of payments and cash receipts in the ensuring period. The dissimilarity of these payments and receipts indicates deficiency or surplus of c

Define materials cost variance, Define Materials cost variance Material...

Define Materials cost variance Material cost variance (MCV) is the difference between the standard cost of material specified and the actual cost of materials used." It is the

Application areas of linear programming, 5 application areas of linear prog...

5 application areas of linear programing in management accounting

Breakeven point, A company manufactures a one product. Estimated cost data ...

A company manufactures a one product. Estimated cost data regarding this product and other information for the product and the company are as follows: Sales price per unit Rs.2000

Multi-collinearity, Multi-collinearity Multiple regression analysis is ...

Multi-collinearity Multiple regression analysis is based on the assumption that the independent variables are not correlated with each other, whenever the independent variables

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd