The CFO (Hamad Al-Dosari) is coming from non-accounting
background and he is seeking your advice regarding the main assumptions underpin variable and absorption?costing methods? ? ? ? ? ?
The CFO (Hamad Al-Dosari) is seeking your advice for applications of variable and absorption costing methods in relation to (a) pricing decision and (b) reporting profit to stakeholders.
It has always been argued that certain underlying assumptions place definite limitations on the use of CVP analysis. Therefore, it is essential that anyone preparing CVP information should be aware of the underlying assumptions on which the information is to be derived. If these assumptions are not recognized, serious errors may result and incorrect conclusions may be drawn from the analysis. In word format, discuss these assumptions underlying cost-volume-profit analysis.? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?
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