After reading this article you will learn about Operating Leverage:- 1. Introduction to Operating Leverage 2. Method of Computing Operating Leverage 3. Degree 4. Relationship between Operating Leverage and CVP Analysis. Introduction to Operating Leverage: Operating leverage arises when the operating profit varies disproportionately with the amount of sales, i.e., it appears from the existence of fixed operating expenses. Because [...]
After reading this article you will learn about Break Even Chart:- 1. Meaning of Break-Even Chart 2. Construction of a Break-Even Chart 3. Method of Preparation 4. Advantages 5. Limitations 6. Multi-Product 7. Types. Contents: Meaning of Break-Even Chart Construction of a Break-Even Chart Types of Break-Even Chart Method of Preparation of Break-Even Chart Advantages of Break-Even Chart Limitations of [...]
After reading this article you will learn about the meaning and ascertainment of cost-volume-profit. Meaning of Cost-Volume-Profit: We know that profit is one of the most important factors while measuring business/ firm's performances. Micro economic theory tells us that profit is a signal for the allocation of resources and a yardstick for measuring managerial efficiency in a market economy. Moreover, [...]