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Marginal Costing is ascertainment of the marginal cost which varies directly with the volume of production by differentiating between fixed…
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Evaluation of Performance, Profit Planning,Fixation of Selling Price,Make or Buy decision,Optimizing Product Mix,Cost Control,Flexible Budget preparation…
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The limitations of Marginal Costing: - The classification of total costs into fixed and variable cost is difficult….
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Cost Volume-Profit (CVP) relationship is an analysis which studies the relationships between the following factors and its impact on the amount of profits….
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P/V Ratio: P/V Ratio (Profit Volume Ratio) is the ratio of contribution to sales which indicates the contribution earned with respect to one rupee of sales…
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Break Even Point (BEP) is a volume of sales where there is neither loss nor profit. That means contribution is enough to cover the fixed costs…
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Margin of Safety is the amount of sales which generates profit. In other words, sales beyond Break Even Point are known as Margin of Safety….
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