managerial Economics and financial accountancy

Unit - II
Meaning of Production: Production refers to the transformation of inputs into outputs (i.e.,
goods and services). Inputs are the resources used in production of goods and services and are
generally classified into four broad categories. These are:
1. Land or Natural Resources.
2. Labour
3. Capital
4. Organization
Production Function: Production Function, basically is an engineering concept but is widely
used in economics for studying production behaviour. The technological relationship between
physical inputs and physical output is referred to as the production function.
Production Function shows the maximum production or output obtained from a given set
of inputs under the present state of technology. It always refers to period of time.
Production Function can be shown as follows:
Input Production function Outputs
The production function can be expressed mathematically in the form of an equation.
Q = f (N, L, K, O)
Where Q = Physical quantity of output
N = Land
L = Labour
K = Capital
O = Organisation
F = functional relationship.
‘Q’ is the dependent variable because the quantity of output depends upon the various
factors of production. N,L,K.O are independent variables which determine the quantity of output.
Assumptions: Production function has the following assumptions.
1. The production function is related to a particular period of time.
2. There is no change in technology.
3. The producer is using the best techniques available.
4. The factors of production are divisible.
5. Production function can be fitted to a short run or to long run.
1

Managerial use of Production Function:The production function is very much helpful to
managers. The following are the managerial uses of production.
 Helpful in determining least cost combination.
 Helpful in taking cost control decisions.
 It helps to determine optimum level of output.
 Useful in drafting plans.
Cobb-Douglas Production Function:
The American economists C.W.Cobb and P.H.Douglas have undertaken an extensive survey in
some manufacturing industries in America from 1899 to 1922 to find out the relationship
between the physical input and physical output and formed an empirical production function,
popularly known as ‘Cobb-Douglas Production Function’. The general form of Cobb – Douglas
production may be described as:
a 1-a
P=b ( L C )
Where,
P = Total Output
b=Positive constant.
L = Quantity of Labour
C = Quantity of Capital
The exponents ‘a’ and ‘1-a’ are the elasticity of production.
According to this they were observed that 1/4th
proportion of capital and 3/4th
proportion of labour contributed towards the improvement of productivity. Therefore,
productivity function can be written like this:
OR
Thus for a given change in labour and capital factor the productivity will change. 0.75
labour factor together with 0.25 capital factor results in productivity 1 (0.25 + 0.75). Thus for
every one percent change in labour as well as capital factors result in one percent change in
productivity. According to Cobb-Douglas if the output has to increase by 1% the input has to
increase in the same proportion.
2
P = b (L ¾ C ¼) P = b (L0.75 C0.25)

Assumptions: It has the following assumptions
1. The function assumes that output is the function of two factors viz. capital and labour.
2. There are constant returns to scale
3. All inputs are homogenous
4. There is perfect competition
5. There is no change in technology
Leontief Production Function:
Leontief production function, evolved by W. Wassily Leontif, uses fixed
proportion of inputs having no substitutability between them. It implies that if the input-output
ratio is independent of the scale of production, there is existence of Leontief production function.
It assumes strict complementarity of factors of production. Leontief production function is also
called as fixed proportion production function.
This production function can be expressed as follows:
q= min (z1/a, z2/b)
where, q = quantity of output produced
z1 = utilised quantity of input 1
z2 = utilised quantity of input 2
a and b = constants
Minimum implies that the total output depends upon the smaller of the two ratios. The
coefficients a and b are the fixed input requirements for producing a single unit of output. It
means that if we want to produce q units of output, we need aq units of capital (z1) and bq units
of labour (z2).
Law Of Production: Production analysis in economics theory considers two types of input-
output relationships.
1. When quantities of certain inputs, are fixed and others are variable and
2. When all inputs are variable.
These two types of relationships have been explained in the form of laws.
i) Law of variable proportions
ii) Law of returns to scale
3

The Law of Variable Proportions (Production Function With One Variable Input):
The Law of Variable Proportions is also known as the Law of Diminishing Marginal
Returns. The Law of Variable Proportions refers to the short run. In the short run factors are of
two types. I. Fixed Factors, 2. Variable Factors. Only variable factors can be changed in order to
increase output. Changes in fixed factors are not possible in the short run.
The law of variable proportions explains the changes in output when a factors of
production is varied while keeping other factors constant. The law states that when at least one
factor of production is fixed or factor input is fixed and when all other factors are varied, the
total output in the initial stages will increase at an increasing rate after reaching certain level of
output the total output will increase at declining rate.
According to the classical economists, the law of diminishing marginal returns applies to
the agricultural sector only. But the modern economists hold that the law is applicable to all the
sectors.
Tabular Representation:
Suppose a former has one acre of land to cultivate. The amount of land and capital
are supposed to fixed factors. The former can vary the number of labour to be employed on its
cultivation. The changes in the number of labours will change the output also.-
No. of Labour
Total Product
(TP)
Average Product
(AP)
Marginal Product
(MP)
1
2
3
4
5
6
7
8
5
12
21
28
30
30
28
24
5
6
7
7
6
5
4
3
5
7 Stage- I
9
7
2 Stage- II
0
-2
-4 Stage-III
In the above table we assume that the land is fixed and successive units of labour
are employed. It can be seen that there are three different stages of law of diminishing returns.
1. The Law of Diminishing Total Returns: In the total output the returns begin to diminish
from the 7th
labour. Every successive labour employed does make some addition to the total
output but 6th
adds nothing and 7th
unit of labour causes diminishing output.
4

2. Law of Diminishing Average Returns: The average product reaches maximum at the 3rd
labour. The marginal product and average product are equal at the point at where 4th
labour is
employed. It starts diminishing from 5th
labour.
3. Law of Diminishing Marginal Returns: The marginal Product is increasing up to 3rd
labour
employed. The additional return is falling from the 4th
labour onwards till it drops down to zero,
at the 6th
labour and after negative.
In the above diagram output is shown on Y-axis and No. of labour shown on X-
axis. The curves TP, AP and MP represent the Total Product, Average Product, and Marginal
Product respectively. This diagram shows three stages of returns.
1st
Stage – Increasing Returns: In the 1st
stage the average product of labour increases, which
reflects the increase in efficiency of labour. Hence, this stage is known as increasing returns.
2nd
Stage – Constant Returns: In the second stage it shows decreasing average and marginal
product of labour. Since the total output goes on increasing, the marginal product is positive.
This stage shows the decreasing efficiency of labour but the efficiency of land continues to
increase.
3rd
Stage – Diminishing Returns: In this stage, the average product decreases still further. The
MP becomes negative and the TP starts decreasing. Hence, in this stage both labour and land
efficiency has been used inefficient.
Assumptions of the Law: The law is based on the following assumptions :
1.The state of technology or the methods of production remain constant.
2.The analysis relates to short period.
3.It is possible to vary the proportions in which the various inputs are combined.
4.The law assumes labour is homogeneous i.e. no differences in labour skills.
5

Law of Returns to scale:
The laws of variable proportions explains the relationship between inputs and output in
short period. But, the laws of returns to scale describe the relationship between output and the
inputs in long-run when all the inputs are increased in the same proportion. Economists use the
phrase, “Returns to scale” to describe the output behaviour in the long run in relation to the
variations of factor inputs. In the long run, adjustments can be made among the different factors
and therefore, all factors become variable during this period. It means, in the long run the size of
the firm can be changed by changing the scale of production.
Returns to scale are of three types.
1. Increasing Returns to Scale
2. Constant Returns to Scale and
3. Decreasing Returns to Scale
I. Increasing Returns to Scale: Increasing returns to scale arise when a given percentage increase
in input leads to a greater percentage increase in the resultant output. For example, increasing
returns arise if 10% increase in inputs of production leads to more than 10% increase in output.
2. Constant Returns to Scale: Constant returns to scale operate if the inputs are doubled, the
resultant output gets doubled. For example, if the inputs are increased by 10%, the resultant
output will also be increased by 10%.
3. Decreasing Returns to Scale: Decreasing returns will occur when a firm continues to expand
its size beyond a particular point. Decreasing returns to scale operate when the percentage
increase in output is less than the percentage increase in input. For example, if inputs are
increased by 10%, the resultant output increases by less than 10%. Decreasing returns to scale
are due to the increasing inefficiency in production.
ISO-QUANTS:
The term ‘Iso’ means equal and ‘Quant’ means quantity. Iso-quant means equal
quantity. Iso-quants are a geometric representation of the production function.
Iso-quant may be defined as “a curve which shows the different combinations of the
two inputs producing the same level of output”.
Iso-quants are called as Iso-product curves, equal product curves or production
indifference curves. The concept of iso-qunat is explained in the following table.
6

In this above table, it shows by increase one input and decreasing another inputs
in any of two inputs give you same output. For example 1unit capital and 15units of labour,
2units capital and 10units of labour gives you same output of 1000units.
The Iso-quant curve is convex to origin. The above diagram shows the different
combination of output factor (i.e., capital and labour) to produce an amount of 1000 units. The
combination of A shows 1 unit of capital and 15 units of labour to produce 1000units. Similarly,
B,C and D employs 2C + 10L, 3C + 6L, and 4c + 3L respectively to produce the same amount of
output i.e., 1000 units.
7
Combination Capital
(in units)
Labour
(in units)
Total output
(in units)
A
B
C
D
1
2
3
4
15
10
6
3
1000
1000
1000
1000

Properties of Iso-Quants:Iso-quants have the following features:
1. Iso-quants have a negative slope: Iso-quants always slope downwards from left to right.
It implies that if one of the factor inputs is decreased, the other has to be increased so that
the total output remains the same.
2. Iso-Quants are convex to origin: Iso-quants must be convex to origin because of the
Diminishing Marginal Rate of Technical Substitution (DMRTS). If we observe the above
table, when the firm is employing the second unit of capital, it is withdrawing 5 units of
labour, for the 3 units of capital, it is withdrawing 4 units of labour and so on. This is due
to the fact as more units of one factor are employed the marginal productivity of the
factor decreases and vice-versa. This is called DMRTS. Due to the DMRTS Iso-quants
take a convex shape.
3. Non-Intersecting: Iso-quants representing different levels of output never intersect or
touch each other.
4. Do not touch axis: Iso-quants neither touches X-axis or Y-axis as both the inputs are
required to product a given level of output
Assumptions:
1. There are only two factors of production, viz. labour and capital.
2. The two factors can substitute each other up to certain limit
3. The shape of the isoquant depends upon the extent of substitutability of the two inputs.
4. The technology is given over a period.
ISO-COST:
An Iso-cost curve is a curve or line representing equal cost. It shows all
combinations of inputs having equal total cost. To drawn an Iso-cost line, we require the
information about unit prices of the two factors and total outlay.
Example: Total outlay is Rs.100.
Labour cost is Rs.10. per unit.
Capital cost is Rs.30 per unit.
8

In the above table 3units of capital and 1unit labour total outlay is Rs.100. and
2units of capital and 4units of labour total outlay and 1unit of capital and 7units of labour total
outlay is also Rs.100.
The iso-cost line AB is derived by joining the loci of points a, b and a, c
represents alternative factor combination.
Properties of Iso-cost line:
1) As total outlay increases, the Iso- cost line moves higher and higher away from the origin
2) The Iso- cost lines are straight
3) Slope of Iso-cost line represents price ratio
Least Cost Combination of Inputs:
The manufacturer has to produce at lower costs to attain higher profits. The isocosts and
isoquants can be used to determine the input usage that minimizes the cost of production.
Let us suppose. The producer can produces the given output of paddy say 100 quintals by
employing any one of the following alternative combinations of the two factors labour and
capital computation of least cost combination of two inputs.
L K Q L&LP (3Rs.) KXKP(4Rs.) Total cost
9
Combination Capital@30/- Labour@10/- Total outlay
A
B
C
3
2
1
1
4
7
3*30+1*10=100
2*30+4*10=100
1*30+7*10=100

Units Units
Output
Cost of
labour
cost of
capital
10 45 100 30 180 210
20 28 100 60 112 172
30 16 100 90 64 154
40 12 100 120 48 168
50 8 100 150 32 182
It is clear from the above that 10 units of ‘L’ combined with 45 units of ‘K’ would cost the
producer Rs. 20/-. But if 17 units reduce ‘K’ and 10 units increase ‘L’, the resulting cost would
be Rs. 172/-. Substituting 10 more units of ‘L’ for 12 units of ‘K’ further reduces cost pf Rs.
154/-/ However, it will not be profitable to continue this substitution process further at the
existing prices since the rate of substitution is diminishing rapidly. In the above table the least
cost combination is 30 units of ‘L’ used with 16 units of ‘K’ when the cost would be minimum at
Rs. 154/-. So this is the stage Least cost combination point.
10

Economies of Scale:
As a result of the large scale production the production cost is low, and it is
known as economies of scale.
Definition:
“As long as the output is increased in the long-run, the cost of production will be
at minimum level; this is known as economies of scale”.
Alfred Marshall divided the economies of scale into two groups. They are:
A. Internal Economies:
Internal economies are those benefits or advantages enjoyed by an
individual firm if it increases its size and the output.
1. Labour economies: A large firm can attract specialist or efficient labour and due to
increasing specializations the efficiency and productivity will be increased, leading to
decrease in the labour cost per unit of output.
2. Technical Economies: A large firm can adopt and implement the new and latest
technology which helps in reducing the cost of manufacturing process, whereas the small
firm may not have the capability to implement latest technologies.
3. Managerial Economies: The managerial cost per unit will decrease due to mass scale
production. Like the salary of general manager which remains the same whether the
output is high or low. Moreover, a large firm can recruit the skilled professionals by
11
Types of Economies of Scale
Internal Economies
1. Labour economies
2. Technical economies
3. Managerial economies
4. Marketing economies
5. Financial economies
6. Risk bearing economies
7. Economies of larger
dimensions
8. Economies of R&D
External Economies
1. Economies of Localisation
2. Economies of Information
3. Growth of Subsidiary
Industry
4. Economies of By-Products

paying them much of capacity to pay high salaries. Thus, mass scale of production will
decrease the managerial cost per unit.
4. Marketing Economies: A large firm can purchase their requirements on a bulk scale
therefore, they get a discount. Similarly the advertisement cost will be reduced because a
large firm produces a variety of different types of products. Moreover, a large firm can
employ scale professional for marketing their products effectively.
5. Financial Economies: A large firm can raise their financial requirements easily from
different sources than a small one. A large firm can raise their capital easily from the
capital market because the investor has more confidence on the large firm than in small
firm.
6. Risk Bearing Economies: The large firm can minimize the business risk because it
produces a variety of products. The loss in one product line can be balanced by the profit
in other product line.
7. Economies of larger dimensions: large scale productions is required to take advantage
of bigger size plant and equipment
8. Economies of R&D: larger organizations: large organizations spend heavily on R & D
to bring out innovative products. Only such firms can cope with competition globally
B. External Economies:
External economies are those benefits which are enjoyed by all the firms
in an industry irrespective of their increased size and output.
1. Economies of Localization: When all the firms are situated at one place, all the firms
will be enjoying the benefits of skilled labour, infrastructure facilities and cheap transport
thereby reducing the manufacturing cost.
2. Economies of Information: All the firms in an industry can have a common research
and development centre through which the research work can be undertaken jointly. They
can also have the information related to market and technology.
3. Growth of Subsidiary Industry: The production function process can be divided into
different components. Each component can be manufactured by specialized firms at a
low cost.
12

4. Economies of By-Products: The waste materials released by a particular firm can be
used as an input by the other firm to manufacture a by-product.
DISECONOMIES OF SCALE:
1. Diseconomies are mostly managerial in nature. Problems of planning, coordination,
communication and control may become increasingly complex as the firm grows in size
resulting in increasing average cost per unit. Sometimes, the firm may also collapse.
2. Diseconomies of scale are said to result when an increase in the scale of production leads to a
higher cost per unit.
3. As the firm grows larger, it may need to seek permission to operate in foreign markets. Any
degree of bureaucratic inefficiency will affect the firms’ profitability and this leads to
diseconomies of scale.
Cost Concepts:
Cost is expenses incurred in producing a commodity. In producing a commodity, a firm has to
employee an aggregate of various factors of production such as land, labour, capital and
entrepreneurship. The producer should pay compensation to these different factors of production.
This compensation is called as cost.
Types of Cost:
1. Actual Costs Vs Opportunity Costs:
Cost of inputs to produce a product. Example, wages paid, expenses of
raw material, machinery etc., these are called as actual cost or outlay cost.
Opportunity cost refers to the “cost of next best alternative foregone”.
Opportunity cost is said to exit when the resources are scarce and there are alternative uses for
these resources. If there is no alternative, there is no opportunity cost.
Eg: A company has deposited Rs.1 lakh in bank at 10% p.a. interest. If the company decides to
withdraw deposit in bank to invest in a new project, it will have to forego bank interest of
Rs.10,000 p.a. which is the opportunity cost.
2. Incremental Costs Vs Sunk Costs:
Incremental costs are the added costs of the change in the level of
production or nature of activity. Example adding new machinery, adding new product, changing
13

distribution channel and so on. Sunk costs are cannot be altered or changed by changing in the
level or nature of business activity; they will remain same whatever the level or activity. For
example, factory building constructed, cost has already been incurred. It cannot be altered or
changed when operations are increased or decreased.
3. Past Costs Vs Future Costs:
Past costs are actual costs incurred in the past. These costs are mentioned
in financial accounts. The management cannot rectify the past cost.
Future cost are those costs are which are to be incurred in the near future.
If the management considered the future costs are very high it can reduce them or postponed the
use of them.
4. Historical Costs Vs Replacement Costs:
Historical costs are those costs that have been originally spent to acquire
the assets. In contradiction, replacement costs are those costs that are to be paid currently if the
assets were to be replaced.
For example, if the price of equipment in 2005 was Rs.10,000 and which
is replaced by the same equipment now cost Rs.13,000 (i.e., 2014), then we can say the historical
cost if equipment is Rs.10,000 and the replacement cost will be Rs.13,000.
5. Fixed Costs Vs Variable Costs:
Fixed costs are those costs that do not vary with the size of its output.
These costs associated with the fixed factors like rent, salaries, buildings, machinery and so on.
Variable costs are those costs which change with the changes in the
volume of output. These costs associated with the variable factors like raw-material, power and
so on.
6. Short run Costs Vs Long run Costs:
This cost distinction is based on the time element. Short run is a period
during which the physical capacity of the firm remains fixed. Any increase in output during this
period is possible only by using the existing physical capacity more intensively.
Long run is a period during which it is possible to change the firm’s
physical capacity. All the inputs are variable in the long run cost.
7. Direct Costs Vs Indirect Costs:
When the cost can be easily identified with a unit of operation it is called
as direct cost. Ex: if the cost of raw material is Rs.20000 and if 5,000 units are produced, it may
be said that the cost of raw material per unit is Rs.4.
14

When the cost cannot be easily identified with a unit of operation it is
called as indirect cost. Ex: salary of GM cannot be traced unit wise.
8. Explicit Costs Vs Implicit Costs:
Explicit costs are those expenses that involve cash payments. These costs include
payment of wages & salaries, payment for raw materials etc. These are the actual costs that
appear in the accounting books.
Implicit costs are the costs of the input factors that are owned by the
employer himself. It does not involve cash payment and hence does not appear in the accounting
books. Ex: cost of depreciation, interest on capital, rent unclaimed on own buildings, salary
undrawn for entrepreneur’s services etc.
9. Out of Pocket Costs Vs Imputed Costs:
Out of pocket costs also known as explicit costs are those costs that
involve cash payments to outsiders. Ex: payment of electricity bill, the purchase prices of a new
equipment etc.
Imputed costs also called implicit costs do not involve cash payment. Even
though such costs do not involve any cash payment but are taken into consideration while
making managerial decisions. Ex: depreciation, interest on capital, rent unclaimed on own
buildings, salary of owner etc.
10. Marginal Cost: The additional cost incurred to produce an additional unit of product is
called marginal cost.
11. Semi-fixed or Semi-variable Costs:
Those costs refer to such costs that are fixed to some extent beyond which
they are variable. Ex: telephone charges or electricity charges.
Cost Curves in the Short Run
Total Cost Curves
The total expenses of production is the total cost of production (TC). Total cost consists
of the total fixed costs (TFC) and total variable costs (TVC).
15

TC = TFC + TVC
The following table shows the total costs.
Units
Total fixed cost
TFC
Total variable cost
TVC
Total Cost
TC
0
1
2
3
4
5
6
60
60
60
60
60
60
60
0
30
4
45
55
75
120
60
90
100
105
115
135
180
The above schedule is shown in the following diagram.
TFC, TVC and TC Curves
180 TC
160
140
120
100 TVC
80
60 TFC
40
20
0 X
0 1 2 3 4 5 6
No. of Units
Short run average and marginal cost curves
Average Fixed Cost : From the total fixed cost, average fixed cost can be found out. Average
fixed cost is obtained by dividing the total fixed cost of the firm with its output.
Total Fixed Cost
Average Fixed Cost =-----------------------------
No. of Units produced
Average Variable Costs: Similarly, average variable cost is obtained by dividing the total
variable cost by the output of the firm.
Total Variable Cost
Average Variable Cost =-----------------------------
No. of Units of Output
16
TFC,
TVC
and
TC

Average Cost: If average fixed cost and average variable cost are added for each level of
output, we get average cost. AC = AFC + AVC
or
It is arrived at by dividing the total cost by number of units produced.
Total Cost TC
AC = ----------------------------- = ------
No. of units produced Q
Marginal Cost : Marginal Cost is the addition made to the total cost by the production of one
more unit of output. It is a change in total cost associated with a change in output.
Change in Total Cost Δ TC
MC = ---------------------------- = --------
Change in Output Δ Q
Relation between average and marginal costs:
The relation between average and marginal costs is clear from the diagram, Average and
marginal cost curves are shown in the figure below : Marginal cost curve cuts average cost
curve at the minimum point of the later.
Y
MC AC
0 X
No. of Units
Costs in the Long-run:
Long-run refers to that period of time over which all factors are variable. The firm has more time
at its disposal to make any change in the production depending on its requirements.
A long-run is also expressed as a series of short-runs.
17
AC
and
MC

Cost-Volume-Profit (CVP) analysis:
Definition:
“CVP analysis is the study of the effects on future profits of changes
in fixed cost, variable cost, sales price, quantity and mix.”
The intention of every business activity is to earn the profit. Profits of
business firms are the result of many factors such as i).Selling Prices, ii).Volume of Sales, iii).
Unit Variable Cost, iv).Total Fixed Cost, etc. To do an effective job, Cost-Volume-Profit (CVP)
analysis is useful to management for studying the relationship between volume, cost, prices and
profits. Within these factors, there is a cause and effect relationship. For example: profit depends
upon sales, selling price to a large extent depends upon cost and cost depends to a large extent
upon volume of production, as it is only the variable cost that varies directly with production.
A CVP analysis is extremely useful to the management in budgeting and
profit planning. It explains the impact of the following on the net profit:
a) Changes in Selling Price
b) Changes in Volume of Sales
c) Changes in Variable Cost
d) Changes in Fixed Cost
CVP analysis uses the techniques of (i) Profit-Volume Analysis and (ii)
Break-even Analysis.
Break-even analysis
Break-even analysis refers to analysis of break-even point (BEP). It is also
called the Cost-Volume-Profit analysis.
The break-even is defined as “a point at which firm has no profit and
no loss. Cost is equal to revenue.” Before a firm plans for profit maximization it has to
determine the Break-Even Quantity or value of output it should produce.
Assumptions:
1.Costs can perfectly be classified into fixed and variable costs.
2.Selling price does not change with volume changes. It remains fixed. It does not consider
the price discounts or cash discounts.
18

3.All the goods produced are sold. There is no closing stock.
4.There is only one product available for sale. In case of multi-product firms, the product
mix does not change.
Significance of Break-even Analysis: Break-even Analysis has a lot of practical importance to
decision makers. They are:
 To understand the Break-even Quantity.
 To known the impact of changes in fixed costs on the Break-even Quantity and profits.
 To known the impact of changes in variable costs on the Break-even Quantity and profits.
 To get target profits.
 To understand the margin of safety.
 To initiate changes in prices.
 Add or Drop decision.
 Make or Buy decision.
Limitations of Break-even Analysis:
 It assumes price to remain constant.
 Seperability of costs into Fixed and Variable.
 It has limited use in case of Multi-product firms.
 There is no change in government policies.
 Availability of Cost-Volume-Profit data.
CALCULATION OF BREAK-EVEN POINT: Break-even point can be calculated in two
methods. They are:
1. Graphical Method
2. Mathematical Method.
1. Graphical Representation of BEP:
19

In the above graph, at output level of ‘OQ’ the total revenue is equal to total cost
i.e., BQ, where the firm is neither getting profit not loss. Hence OQ is the break-even quantity of
output. At output level less than OQ the firm is suffering losses and beyond that it is reaping
profits.
2. Mathematical Method: In this method by applying the following formulas BEP can be
calculated.
BEP formulas
When Per Unit data is Given
20

When Overall Data is Given
When two years data is given P/v ratio formula is:
21

managerial Economics and financial accountancy

More Related Content

Similar to managerial Economics and financial accountancy

More from mbadepartment5

Recently uploaded

managerial Economics and financial accountancy