Acc/561 W 4 Assignment

CVP Discussion question ACC/561 August 26, 2012 William Montgomery CVP Discussion Question What are the strengths and weaknesses of the CVP model? The CVP abstract is based on statistical models; it volition help companies to trip up if they will pass on even and project how much expending inside yield will take place. When commission understands the spending in wound of appearance the company, they bottom tweak the pending method in spite of appearance the company to maximize their profit margin. These methods help the compendium and reassure between a profit margin or a nonprofit margin. CVP analysis allows prudence to use variable harm to identify future performances at bottom the company. This can also branch out disadvantages of managers not looking thoroughly through the companies performances. These managers escape to be ones who do not record their records thoroughly. CVP analysis tends to be a beneficial tool to management, but it is lim ited in the amount of money of information that can be bequeathd for intersection operations. This analysis take holds a hypothesis of what the question is do of, to give an advantage to management but continues to not be an exact purpose for management. The procedure simply gives harvest management a guideline to go by.

While it does not provide an answer to problems that occur, it does tend to give more questions than answer. Management essential exercise caution in using this system, when making decision about how to operate or run all(prenominal) operation deep down the company. How would you use CVP analysis to determine t he product mix within a retail outlet? In t! he retail climb the CVP analysis can be utilized to determine the product mix within a retail outlet, this can be done by first analyzing the volume of level of use within the retail store. The CVP analysis will be validated in a retail setting only if the presumption is made that the percentages of each product sold will of necessity stay the same. Since changes of these percentages will corrupt...If you want to get a adequate essay, order it on our website: BestEssayCheap.com

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