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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
Accounting Cycle is the name given to the combined process of recording and processing the accounting proceedings of a company. The series of steps start when a transaction takes p
It refers to the length of time given to the buyer to pay for their purchases. Throughout this period no interest is charged on the excellent amount. The credit period usually vari
Transportation model Table A more compact method for representing the transportation model than the linear equations is to use what we call the transportation tableau. It is a
limitation
Participative Budgets In this approach to budgeting, budgets are developed by lower level managers who then submit them to their superiors. The budgets depend on the lower level
LEARNING CURVE THEORY The first time a new operation is performed both workers and operating procedures are untried but as the operation is replaced the workers becomes more fa
POINT ESTIMATE OF PROBABILITIES This approach requires a number of different values for each of the uncertain variables to be selected. These might be values that are reasonabl
Disadvantages of Simulation 1) Although all models are simplification of reality, they may still be complex and require a substantial amount of managerial and technical time.
interest rates
what is cross elasticity of demand? is it positive for substitute or compliments? show in a diagram relating to the demand for the coffee to the price of tea
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