Chapter 3-Summary

Chapter 3-Summary - • Operating Leverage o Te effect that...

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Chapter 3 CVP Analysis Short Run Decisions Assumptions CM BE point in units BE point Sales BE profit planning-Targeted OI o NI = OI X (1 – Tax Rate) o OI = NI/(1- TR) Sensitivity Analysis MOS = Budgeted Sales – BE Sales; o MOS% = MOS / Budgeted Sales
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Unformatted text preview: • Operating Leverage o Te effect that FC have on changes in OI as changes occur in units sold OL = TCM/OI • The effect of sales mix on CVP • Multiple Cost Drivers: a separate VC needs to be calculated for each driver....
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This note was uploaded on 03/21/2012 for the course BACC 7121 taught by Professor O during the Spring '12 term at Seton Hall.

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