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

Draw a time line for the assembly department, Computing equivalents units a...

Computing equivalents units and assigning costs to completed units and ending work in process; no beginning inventory or cost transferred in (30 -45min) Sue Electronics makes CD

Compute the effect of relaxing credit effort on net profit, M/s ABC is seei...

M/s ABC is seeing relaxing its collection efforts. At current its sales are as Rs.40 lakhs, the ACP is here 20 days and variable cost to sales ratio is .8 and bad debts are as .05

Responsibility accounting, Responsibility Accounting This is a term use...

Responsibility Accounting This is a term used to define the measuring of performance of decentralized units, using account results. Responsibility accounting recognizes various

Determine the price sensitivity, Price sensitivity Nagle has identified...

Price sensitivity Nagle has identified nine factors that contribute to price sensitivity and has also presents various methods or techniques to measure it. The factors that con

Balanced score card, Balanced Score Card This is a popular approach in ...

Balanced Score Card This is a popular approach in current management thinking which consists of a variety of indicators both financial and non-financial. The balanced scorecard

What are the principles of management accounting, What are the Principles o...

What are the Principles of management accounting? 1. The procedures and methods to be followed for keeping and analyzing financial statements should have consistency. It enable

Case study, Your company provides you with a car. You are told only to driv...

Your company provides you with a car. You are told only to drive in Dade and Broward and only to use the car for business purposes. One weekend your family is going to the Keys. Yo

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