Accounting For Managers

INTRODUCTION1

BREAK-EVEN1

LEICESTER LTD BREAK-EVEN POINT AND THE MARGIN OF SAFETY1

EVALUATION OF ESTIMATED PLANS3

LIMITATIONS OF BREAK-EVEN ANALYSIS4

ACCOUNTING CONCEPTS: HISTORICAL COST, PRUDENCE, ACCRUALS, AND GOING CONCERN5

ACCRUALS6

PRUDENCE7

GOING CONCERN8

HISTORICAL COST10

CONCLUSION11

APPENDIX A12

APPENDIX B13

REFERENCES14

INTRODUCTION

The basis of fiscal decision-making is economic abstract. at that place are a number of valuation tools currently offered to construction managers, including present worth analyses, benefit/ damage analysis, equivalent annualized be, cash flow analysis and break-even. Berryman & Nobe (1997)

BREAK-EVEN

Some of the nearly significant decisions to be made in financial anxiety are those concerning to pricing; the prices must be high nice to cover all costs and offer a profit. Cost-volume-profit analysis is used to help us how changing volumes of sales or revenue affect profits. The foundation of this analysis is the calculation of break-even apex and understanding how profit will vary with a qualifying in the volume of sales. Anon1 (2003)

LEICESTER LTD BREAK-EVEN POINT AND THE MARGIN OF SAFETY

The break-even point is define as the point where sales or revenues equal expenses. There is no profit made or loss incurred at the break-even point.



This figure is important for anyone that directs a business since the break-even point is the rase limit of profit when setting prices and determining margins; if the break-even point is non achieved, that business will (or should) finally go out of business. clearly the break-even point becomes very significant when calculating a scheme for net profit. Deal (1999-2003)

The break-even point can be convey:

total fixed costs

break-even point =

contribution margin ratio

whereas:

Total Fixed costs are the sum of the fixed costs. Fixed costs are those costs that throughout the forecast period, are unaffected by changes in output. Fixed costs take account of, but not limited, depreciation on...

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