Discuss the Cost- Volume- Profit assumptions

Q: Define and explain the contribution margin ratio.

A: Contribution Margin: It is defined as the difference between the sales and the variable cost. In…

Q: Explain the following basic principles in cost management: a. profits b. life cycle costs c.…

A: basic principles in cost management explained Indirect costs Expenses which are  not readily…

Q: Define cost behaviour.

A: High-Low Method: The high-low method is the method by which the variable component and the fixed…

Q: What is Unit-Profit or Unit-Cost Calculation?

A: Cost:   It is the economic value of resources incurred by a firm to manufacture a product or render…

Q: Define the following concepts: a)Prime cost    b) Non production cost

A: All costs incurred are categorised into production and non production cost on the basis of the…

Q: Define initial direct costs.

A: Initial direct cost: A cost that is incurred during the process of initiating the agreement of lease…

Q: Define cost-volume-profit analysis?

A: Cost-Volume-Profit Analysis (CVP Analysis): CVP Analysis is a tool of cost accounting that measures…

Q: Define the following terms: (a) cost behavior and (b) relevant range.

A: Cost behavior and relevant range are terms under cost accounting. Cost behavior studies the pattern…

Q: Cost behavior Costs Value Chain O Cost drivers

A: Answer: Cost behavior is defined as the changing nature of cost dependent on any units. Costs are of…

Q: Describe analyzing of profit using contribution margin.

A: The contribution margin ratio is the percentage of difference in a company's sales and variable…

Q: List the most important assumptions of cost-volume-profit analysis.

A: Cost Volume Profit Analysis (CVP Analysis): This analysis is helpful in determining that how any…

Q: Distinguish between prime costs and conversion costs.

A: Definition of Prime Cost:Prime cost is refer as the cost incurred for manufacturing of goods. It is…

Q: What is the difference between Cost-Volume Profit graph and Profit-Volume graph?

A: Introduction:- Cost-Volume Profit graph displays the relationship between the cost of units…

Q: Describe the conference method for estimating a cost function. What are two advantages of this…

A: Conference method:

Q: Describe the approaches of target profit.

A: Target Profit: It refers to the desired amount of profit that a company expects to achieve by the…

Q: Define the term Current cost.

A: Cost: The amount paid to purchase the asset, install it, and put it into operations, is referred to…

Q: Define the following terms, and explain the relationship between them: (a) cost estimation, (b) cost…

A: Cost:   Cost can be defined as the cash and cash equivalent which is incurred against the products…

Q: Define the following concepts: a)Prime cost    b) Non production cost         c)Total cost

A: The term cost refers to the monetary value of expenditure for raw materials, technology, supplies,…

Q: Define the term Cost approaches.

A: Cost: The amount paid to purchase the asset, install it, and put it into operations, is referred to…

Q: Describe the Unit-Profit or Unit-Cost Calculation?

A: A unit cost is a net expense a firm has incurred to manufacture, store, and sell one unit of a…

Q: Define the term total costs.

A: Costs: Costs refer to the expenses incurred by the business in the procurement of the materials,…

Q: Define basic earning power (BEP) ratio

A: The formula to compute basis earning power ratio as follows:

Q: Define the term contribution margin ratio.

A: Contribution margin is the measure of ability of the company to cover its variable costs with the…

Q: Define direct costs and indirect costs?

A: Direct cost: Direct cost is the cost assigned to the cost object which is directly related to that…

Q: Briefly define total cost and marginal cost.

A: Cost: The amount paid to purchase the asset, install it, and put it into operations, is referred to…

Q: How is cost-volume-profit analysis useful?

A:

Q: Define the following terms: incremental cost, opportunity cost, and sunk cost.

A: Incremental Analysis: Incremental analysis refers to the analysis of differential revenue that could…

Q: Explain the impact of the cost-volume-profit connection on pricing strategy.

A: The cost volume profit analysis analyse the impact of the variable cost and fixed cost on the…

Q: cost benefit model

A: The benefit under the cost-benefit model is calculated by deducting the associated cost from the…

Q: 2. What is cost-volume-profit analysis and what are the important assumptions of this analysis?

A: Profit analysis entails dissecting a company's reported profit figure to determine the true extent…

Q: explain the importance of cost behavior

A: Cost behavior refers to any change in the behavior of cost due to change in the level of output or…

Q: Y,a,b and X explain these with help of examples according to cost behaviour

A: Cost behavior analysis helps to understand the change in the total cost with respect to the change…

Q: Define cost pool?

A: Step 1 The amount of money expended on producing a particular product is referred to as cost. Direct…

Q: Describe the concepts of contribution margin, relevant range, and relevant costs

A: Solution:- Analysis the concepts of contribution margin, relevant range, and relevant costs as…

Q: Describe factors for measuring cost allocation.

A: Cost:   It is the economic value incurred by the company to manufacture a product or render a…

Q: What is a cost-volume-profit analysis?

A: Cost: The amount paid to purchase the asset, install it, and put it into operations, is referred to…

Q: Summary for Cost Volume Profit Analysis

A: Cost Volume Profit Analysis: It is the technique of managerial accounting which examines how changes…

Q: Define prime cost and conversion cost.

A: Prime cost and conversion cost are the two most important concepts of cost accounting. These…