ACC 117 Lecture Notes - Lecture 30: Operating Leverage, Income Statement, Break Even
4 Dec 2020
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Document Summary
Additional cvp topics: sales mix definition. Definition- the relative percentage in which a company sells its multiple products. Definition- a formal written statement of management"s plans for a specified time period, expressed in financial terms. Used as a planning and communication toll for management. Role of accounting- during the budgeting process, (a) it provides historical data on revenues, costs, and expenses, (b) expresses management"s plans in financial terms, and (c) prepares periodic budget reports: benefits. It requires all levels of management to plan ahead. It provides definite objectives for evaluating performance. It creates an early warning system for potential problems. It facilitates the coordination of activities within the business. It results in greater management awareness of the entity"s overall operations. It motivates personnel throughout the organization: essentials to effective budgeting. Sound organizational structure- authority and responsibility are clearly defined. Research and analysis- determined the feasibility of new products, services and operating techniques.
