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Cost Volume Profit Analysis

Q1. Analyze some examples of relevant and irrelevant Cash Flows for one Saudi Company? Q 2 a - Discuss why managers estimate a cost function and use Cost volume Profit analysis? Give numerical example of cost function and Cost Volume Profit Analysis and analyze how it will be used by managers?

           b- Suppose actual costs are higher than estimated cost. Analyze why you may have this difference between actual and estimated costs?

Q 3 Altawfik Corporation is estimating the cost function for total cost of production of product A using the two points method.  The data collected for the past year is as following:

                                        Number of units        Total

                Quarter            produced                  Costs

                      1                     4,000                $   1,000

                      2                     5,400                     1,280

                      3                     7,000                     1,600

                      4                     9,000                     2,000

            Using the two points methods, choose two points with which you estimate the cost function.

        Q 4 Give one example of Saudi companies using job costing and one example of Saudi companies using process costing and discuss the difference between them?  

Cost Volume Profit Analysis

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