The Basic Profit Equation: Cost-Volume-Profit analysis (CVP) relates the firm’s cost structure to sales volume and profitability. A formula that facilitates CVP analysis can be easily derived as follows: Profit = Sales – Expenses Profit = Sales – (Variable Costs + Fixed Costs) Profit + Fixed Costs = Sales – Variable Costs Profit + Fixed Costs = Units Sold x (Unit Sales Price – Unit Variable Cost) This formula is henceforth called the Basic Profit Equation and is abbreviated:
Words: 791 - Pages: 4
MANAGEMENT ACCOUNTING (Relevant Costing and Standard Costing) Instructions: In separate sheet of paper, number your paper 1 to 120, and write the letters only (a,b,c,d, T, F) TRUE-FALSE STATEMENTS 1. Incremental analysis identifies the probable effects of management decisions on future earnings. 2. In making decisions, management considers only financial information because accounting is presented in financial context. 3. In incremental analysis, total fixed costs will
Words: 4833 - Pages: 20
Healthy Foods, Inc., sells 50- pound bags of grapes to the military for $10 a bag. The fixed costs of this operation are $80,000, while the variable costs of the grapes are $.10 per pound. a. what is the break-even point in bags b. calculate the profit of loss on 12,000 bags and on 25,000 bags. c. what is the degree of operating leverage change as the quantity sold increases? d. If healthy foods has an annual interest expense of $10,000, calculate the degree of financial leverage at both 20,000 and
Words: 679 - Pages: 3
embodies a duty or responsibility 2. There is little or no discretion to avoid a future transfer or use of assets to satisfy the obligation, and 3. The obligating event has already occurred. In June 2001 the FASB issued a Statement No. 143, Accounting for Asset Retirement Obligations requiring entities to record liabilities for tangible, long-lived assets that must be retired or disposed of in a specified way by law or contract. Such liabilities are known as Asset Retirement Obligations (AROs)
Words: 1864 - Pages: 8
Harunur Rashid Professor Department of Accounting and Information Systems University of Chittagong Submitted by Md. Ariful Hoque B.B.A. (Hons.): 4th Year. Class Roll: 4541 Exam Roll: 2004 /42 Session: 2003-2004 Department of Accounting and Information Systems University of Chittagong Date of submission: August 25, 2009 Letter of Submission To Dr. Harunur Rashid Professor Department of Accounting and Information Systems University
Words: 2742 - Pages: 11
manner and the firm is meeting its objective of generating the maximum profit. Information reporting is also important for audit purpose and to present to the government or other regulatory agencies to ensure that the firm is following the general accounting standards set. Hence information plays a major role in the decision making process and should be timely, accurate and complete to ensure all issues and key performance indicators are accounted for and the right decision can be
Words: 3425 - Pages: 14
Ed Kiefer Chapter 4 4-5 10500-8500/900000-300000 2000/600000= .003 8500-(.003x300000) Low 8500-900=7600 Copies 20500-(.003x900000) High 20500-2700=17800 Copies 4.8 Variable costs Staff Salaries 33000 Office supplies 300 Total 33300 Fixed costs Manager salaries 8000 Dep of equip 400 Share of building Costs 2000 Total 10400 Variable Total
Words: 325 - Pages: 2
Chapter 8 Activity-based costing Problems with conventional product costing systems General features of conventional product costing systems Direct material and direct labour costs are traced to products Manufacturing overhead costs are allocated to products using a predetermined overhead rate Manufacturing overhead rate is calculated using some measure of production volume Non-manufacturing costs are not assigned to products
Words: 1246 - Pages: 5
The Difference Between Managerial Accounting and Financial Accounting ACC 560 Term Paper In this term paper the author will discuss Managerial Accounting and the components of Managerial Accounting. The author will also compare the different components of financial accounting compared to managerial accounting. According to McGraw Hill, Managerial Accounting is concerned with providing information to managers, people inside an organization who direct and control
Words: 1116 - Pages: 5
Uitwerking Case 8-1 Allied Office Products Door: Joey de Klerk (481002) en Roel van Berkel (468870) Introductie Allied Office Products is a large corporation that builds its reputation on its annual sales of $900 million in business forms and specialty in paper products. Its paper products vary from envelopes to greeting cards and writing papers. Allied has incorporated a new program called Total Forms Controls (TFC) for its clients enabling Allied to separate this business forms division
Words: 1285 - Pages: 6
