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Essay / Research Paper Abstract
This 4 page paper looks at several issues that will be considered when two potential investments are being considered, this includes the break even point (BEP), the cost volume profit (CVP), marginal sales (MS) risk and customer satisfaction. The bibliography cites 4 sources.
Page Count:
4 pages (~225 words per page)
File: TS14_TEcostacc1.rtf
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Unformatted sample text from the term paper:
may be several areas that require consideration. The investors will want to assess the way that risk may be present and the easy that they will gain a potential reward,
to undertake this several different concepts can be considered. If there are many investment potentials the investors may want to consider the point as which the BEP is reached. This
is the break even point, the point at which the firm is able to recoup all of the investment made, this is the point at which there is no profit
and no loss (Chadwick, 2007). The BEP will be higher where there are higher set up costs, if all other elements are equal. An investment that is labour intensive may
have a lower break even point and the cot of labour is a variable cost, and as such it is a cost that is incurred as it is used, so
does not represent set up costs. However, if there is a low break even point there may be less of an opportunity cost, as the money is recouped and
can be invested in another investment. The CPV is the cost profit volume analysis; this is where there is an assessment of the amount of sales that need to made
to reach specific goals. The investors can calculate the total revenue and profit that will be generated as a result of a set level of sales, or they can
consider how many sales need to be made to reach a set level of profit. This takes into account both the fixed and the variable costs. This also allows a
comparison to be made and the sales can be calculated as a result of potential sales from sales projections. This will allow both of the projects to be compared in
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