Accounting

Ways of Lowering the Break-Even Point Break-even point is that level of operation at which sales revenues for a period are equal to the costs…

An increase in Income Tax Rate affects the Break-Even Point An increase in the income tax rate does not affect the breakeven point. Operating income…

Cost-volume-profit (CVP) analysis is used to determine how changes in costs and volume affect a company’s operating income and net income. CPV analysis is a…

Product’s Contribution Margin Ratio: Product Contribution margin ratio is commonly expressed as a percentage of sales prices. It is the difference between a company’s sales…

“Absorption costing considers more categories of costs a product cost” Absorption costing, also known as full costing is a method by which all of the…

The significance of Margin of Safety The margin of safety establishes the surplus of actual sales earnings over and above the break-even earnings. The excess…

The margin of Safety Ratio (M/S Ratio) The excess of actual or budgeted sales over the break-even volume of sales is called the margin of…

CPV analysis is a powerful tool that helps managers understands the relationships of cost volume and profit. Cost volume profit (CVP) analysis is the relationship…

Usages of variable / direct costing in decision making: Under variable costing, only those manufacturing costs that very without put are treated as product costs.…

Manufacturing overheads are indirect costs of a product. If they are direct costs, they won’t be termed overheads. Manufacturing overhead (also referred to as factory…