MBAA-102 Accounting for Managers – Unit 11

MBAA-102 Accounting for Managers – Unit 11

Objectives: understand the concept of break even analysis, impact of change in sales volume, price, variable cost, fixed costs on profits; apply cost-volume profit relationship for profit planning; understand the concept of margin of safety, angle of incidence, and profit volume ratio in decision making; and examine the assumptions and limitations of the break even analysis.

Materials:
The relevant material is here.

Questions:

1. ‘Cost-volume profit analysis and break even point analysis are same’ Comment?
2. What are different methods of computing break even point?
3. “The break even chart is an excellent planning device” Comment
4. Explain the significance of Profit-Volume ratio, Margin of Safety and Angle of Incidence?
5. What is Contribution ? How does it helps the management in taking managerial decisions?