How does assuming that operating activity occurs within a relevant range affect cost-volume-profit analysis?

Q: Contribution margin ratio definition and how is useful in planning business operations?

A: Solution:- Contribution margin ratio definition as follows:-

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

A: Cost ManagementCost management is the process of organizing and overseeing a company's spending…

Q: production cost is liability or equity?

A: Production or cost of the product shall refer to the cost incurred by the business of making the…

Q: how does the contribution margin pricing method differ from ratio pricing method?

A: The question is based on the concept of pricing policy and methods. The product's price can be…

Q: Discuss the merits and demerits of the cost volume profit analysis (CVP)

A: Cost volume profit analysis is one of the important concept used in cost accounting. Under this…

Q: What is the Importance of the Profit Ratio?

A: Profit ratio: Profit ratio is utilized to assess the corporation's capacity to make revenue as…

Q: How does the lower of cost or market relate to profit margins?

A: Answer: The lower cost or market implies that, depending on how historical costs and market costs…

Q: What would be the outputs for the given assumptions:   Total revenue: Total costs: Total profit:

A: Break Even Point is that point at which there is no profit & loss would arise. At break even…

Q: Which is more consistent with cost-volume-profit analysis, variable costing or absorption costing?…

A: Absorption Costing: "Absorption costing is a method that allocates "direct labor, direct materials,…

Q: What is a product cost? What is a period cost? What is the difference and why is it important to…

A: Product cost refers to all costs directly pertaining to the production of a product. While, Period…

Q: Is variable or absorption costing a better method of computing income from operations?  Why?

A: Variable costing only covers the variable costs directly involved in production but excludes all…

Q: Which method results in a more realistic amount for income because it matches the most current costs…

A: The current costs is based on the purchasing of the latest products which means the having book…

Q: explain what is Net profit margin with a comprehensive example

A: The objective of this question is to understand the concept of Net Profit Margin, a key…

Q: In preparing a relevant cost analysis when operating a full capacity, the analysis should consider…

A: Relevant cost analysis is use to choose one alternative out of available alternatives, this is…

Q: What information is needed to measure the absolute profitability of a segment?

A: Absolute profitability measures are defined as the measure, which used to impact an overall profits…

Q: What is Re-order quantity? What is Re-order level? What is Maximum stocklevel? With respect to…

A: Inventory management consist of various levels namely re-order level, re-order quantity, maximum and…

Q: Define the term profit oriented.

A: Profit Oriented Company: Profit oriented company are refer as the company which main aim is to earn…

Q: What effect do minor deviations from the EOQ have on totalinventory cost?

A: Minor variations from the EOQ will not in general highly affect the total inventory cost except if…

Q: How do managers decide whether a cost is avariable or a fixed cost?

A: Cost refers to the amount of money incurred for acquiring a product or manufacturing a product. Cost…

Q: What is operating profitability ratio (OP)?

A: These ratios evaluate a firm’s ability to earn profits. They help the stakeholders of the company to…

Q: iable costs in the context of cost-volume-profit (CPV) analysis?  b. Fixed costs in the context of…

A: Cost volume profit analysis is very important for the companies because it tells them that whether…

Q: What is the meaning of contribution margin ratio? How is this ratio useful in planning…

A:

Q: Define how costs of goods and other costs such as taxes contribute to the performance besides sales?

A: Performance of the business is usually measured by the ability of the company to generate the net…

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: Compare and contrast the historical cost accounting model with the fair value accounting model. What…

A: The cost accounting model is a method of accounting that focuses on the measurement, analysis, and…

Q: Which of the following costs change in total directly and proportionately with respect to the…

A: The objective of the question is to identify the type of cost that changes in total directly and…

Q: What are the various levels of aggregation to which the lower of cost and net realizable value rule…

A: LCNRV (Lower of Cost or Net Realizable Value) approach: It is an approach that compares the cost of…

Q: What variable affecting gross profit should the manager focus his attention? Why?

A: Gross Profit is the profit arrived at by deducting cost of goods sold from the turnover or the…

Q: What is operating profit margin?

A: The operating profit is the profit earned during the year after deducting all the operating expenses…

Q: What type of cost is included in economic costs, but not included in accounting costs?a. Explicit…

A: Economic costs are the costs in which consideration is given to opportunity costs as well.

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: Merits and demerits of the cost value profit analysis CVP

A: Lets understand the basics. Cost volume profit analysis (CVP) is as name suggest analysis of total…

Q: What is life-cycle and/or full-cost accounting? IS THERE A DIFFERENCE?

A: In this question, we have to tell about life-cycle costing and full cost accounting, whether these…

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.