Acc/561 W 4 Assignment

CVP Discussion heading 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 run low even and project how much expending inside mathematical merchandise will take place. When commission understands the spending in spite of appearance the company, they bottom tweak the pending method at bottom the company to maximize their profit margin. These methods help the compendium and serve between a profit margin or a nonprofit margin. CVP analysis allows focus to use variable cost to identify future performances at bottom the company. This can also tell out disadvantages of managers not looking thoroughly through the companies performances. These managers lead to be ones who do not record their records thoroughly. CVP analysis tends to be a beneficial tool to management, but it is limite d in the amount of money of information that can be grantd for produce 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 product 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 must(prenominal) exercise caution in using this system, when making conclusion about how to operate or run all(prenominal) operation at heart the company. How would you use CVP analysis to determine the product mix within a retail o! utlet? In the retail orbit 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 natural action within the retail store. The CVP analysis will be validated in a retail setting only if the guess is made that the percentages of each product sold will need liberaly stay the same. Since changes of these percentages will corrupt...If you want to get a full essay, order it on our website: OrderCustomPaper.com

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