management accounting

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CVP Analysis revision question (NBAA November 2016)

Midundo kabambe a manufacturer of electronic equipment, decided to analyze the profitability of new portable compact disc (CD) player. On CD player line, the company incurred TZS.2,520,000,000 of fixed cost per month while obtaining total revenue  of TZS.6000,000,000 from selling 20,000 units. The variable cost was TZS 120,000 per unit
Recently a new machine used in production of CD player … Read the rest

Financial Operations Ratio-meaning and formula

Financial Operations Ratio-meaning and formula

The efficiency of the financial management of a firm is calculated through the financial operations’ ratio. This ratio is a calculating device of the cost and the return of financial charges. This ratio signifies a relationship between net profit after tax and operating profit.

The formula for the computation of this ratio is:

Financial Operations Ratio =net profit after tax/operating Read the rest

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Going concern concept – meaning.

This concept assumes that the business enterprise will continue to operate for a fairly long period in the future. The significance of this concept is that the accountant while valuing the assets of the enterprise does not take into account their current resale values as there is no immediate expectation of selling it. Moreover, depreciation on fixed assets is charged … Read the rest