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5. Impractical to assume sales mix remain constant since this depends on the changing demand levels. 6. The assumption of linear property of total cost and total revenue relies on the assumption that unit variable cost and selling price are always constant. In real life it is valid within relevant range or period and likely to change. [2]
The term sales in a marketing, advertising or a general business context often refers to a free in which a buyer has agreed to purchase some products at a set time in the future. From an accounting standpoint, sales do not occur until the product is delivered. "Outstanding orders" refers to sales orders that have not been filled.
Sales variance is the difference between actual sales and budgeted sales. [1] It is used to measure the performance of a sales function, ...
No matter how meticulous finance teams are, mistakes happen. In fact, it's estimated that accounting errors and manual financial reporting cost U.S. businesses around $7.8 billion a year. And ...
Contribution margin analysis is a measure of operating leverage; it measures how growth in sales translates to growth in profits. The contribution margin is computed by using a contribution income statement, a management accounting version of the income statement that has been reformatted to group together a business's fixed and variable costs.
Profit maximization seen from a Throughput Accounting viewpoint, is about maximizing a system's profit mix without Cost Accounting's traditional allocation of total costs. Throughput Accounting actions include obtaining the maximum net profit in the minimum time period, given limited resource capacities and capabilities.