Questions from Management Accounting

Q: An organisation experiences a 20 per cent increase in pre-tax

An organisation experiences a 20 per cent increase in pre-tax profits when revenues increase 20 per cent. Assuming linearity, what do you know about the organisation’s cost function?

Q: What is the effect on an entity’s breakeven point of a lower

What is the effect on an entity’s breakeven point of a lower income tax rate?

Q: To estimate revenues, costs and profits across a range of activity

To estimate revenues, costs and profits across a range of activity, we usually assume that the cost and revenue functions are linear. What are the specific underlying assumptions for linear cost and r...

Q: Explain the relationship between margin of safety percentage and degree of operating

Explain the relationship between margin of safety percentage and degree of operating leverage.

Q: Wright Medical Centre has identified the following activities and cost drivers for

Wright Medical Centre has identified the following activities and cost drivers for the coming financial year. / Required Calculate the activity cost rate for each activity.

Q: How do volume discounts from suppliers affect our assumption that the cost

How do volume discounts from suppliers affect our assumption that the cost function is linear? Explain how we incorporate this type of cost into a CVP analysis.

Q: Explain the term ‘sales mix’ in your own words. How

Explain the term ‘sales mix’ in your own words. How does sales mix affect the contribution margin?

Q: How are CVP analysis and breakeven analysis related?

How are CVP analysis and breakeven analysis related?

Q: Outline the meaning of the profit planning or strategic budgeting process.

Outline the meaning of the profit planning or strategic budgeting process.

Q: Why do proponents of the Beyond Budgeting movement recommend abandoning traditional budgets

Why do proponents of the Beyond Budgeting movement recommend abandoning traditional budgets?