Questions:
1. The effect of price reduction is always to reduce the profit/volume ratio, to raise the break even point and to shorten the margin of safety. Explain and illustrate by numerical example.
2. What is a break even chart? What is a profit graph? State the purpose of constructing such charts.
3. State the assumptions and limitations of break even point analysis.
4. Construct a profit graph with suitable data and obtain an equation of the profit line. Use this equation in profit planning.
5. What are the different methods available for segregation of semi variable expenses? Explain with examples.
6. Discuss fully the applications of marginal costing.
7. Discuss the reasons for difference between profits under marginal costing and absorption costing.
8. Discuss the limitations of marginal costing.
9. What do you understand by profit/volume ratio? Discuss the importance of the profit/volume ratio and state how it can be improved?
10. Discuss the importance of break even point.