Answer:
Cost-volume-profit [CVP] Analysis
The cost-volume-profit analysis model assumes that the total fixed cost, the variable cost per unit, and the selling price per unit remain constant within the relevant range.
It is very difficult for a company to remain in the relevant range, where the assumptions will be obtained. Market forces, including the dynamics of competition change the underlying assumptions. For example, a company may become more efficient in its operations, thereby reducing its variable cost per unit. The total fixed cost may also change when the company increases its activity levels.
However, these limitations do not make the model less useful. It can be relied on to make short-run profit and pricing decisions.
Explanation:
The management of a business finds the CVP model useful in making important management decisions, especially decisions that relate to budgeting of production and sales, cost control, and profit planning. Management uses the CVP model to determine the break-even point in both units and sales dollars. Overall, management relies on the model to select its competitive products.
Answer:
Under variable costing, the company's net operating income for the year would be $60,000 lower than under absorption costing.
Explanation:
The computation of the operating income under variable costing is shown below:
But before that following calculations need to be done
Fixed manufacturing overhead per unit is
= $240,000 ÷ 20,000 units
= $12 per unit
Ending Inventory units is
= 20,000 units - 15,000 units
= 5,000 units
Now Cost of ending Inventory deferred under absorption costing is
= 5,000 units × $12
= $60,000
So, the second option is correct
Answer:
Part of the model: thinking can be taught, thinking is an active transaction between the individual and the data, the process of thought evolves by a sequence that is lawful.
Answer:
D. asymmetric information
Explanation:
Asymmetric information is when parties in a transaction do not have equal information.
In this transaction, Jessica has more information than blake. She knows the machine is faulty while Blake doesn't.
I hope my answer helps you
