common law and equity Essays -- essays research papers

Value is every now and again alluded to as an enhancement to the custom-based law. Cruzon characterizes Equity as an arrangement of law created by the court of chancery in corresponding with the precedent-based law. It was intended to supplement it, giving solutions for circumstances that were inaccessible at Law. Along these lines, Equity gave an element of adaptability and equity that was as a rule lacking on account of the normal law’s unbending nature. This unbending nature comes from the way that, while courts once in a while changed their wards and systems, the major premises and observable types of the customary law went to a great extent unaltered between the thirteenth and nineteenth hundreds of years. The precedent-based law was viewed as a bequest for all Englishmen; be that as it may, as the Crown kept on forcing new purviews, numerous sculptures looked to ensure the peoples’ option to fair treatment. In 1215 the Magna Carta was given which tried to ensure a free man’s right to life, freedom, and property aside from by the fair treatment of the law. These resolutions intended to restrict the intensity of the crown, the very force that had presented the precedent-based law as an option in contrast to the past limited type of equity, and described a move in the custom-based law. However, fair treatment enactment must be summoned where the precedent-based law was viewed as insufficient, and petitions were sent to the ruler, looking for his effortlessness, when this was believed to be the situation. Progressively the quantity of these petitions expanded so much that they must be saved for extraordinary chambers of the parliament, and as they kept on expanding, just the most noteworthy petitions were held for the parliament. The rest, basically private suits, were given to individual councilors, for example, the chancellor, chief of naval operations, or marshal. These councilors developed in significance as solicitors started approach the proper individual straightforwardly. Out of the councilors’ game plans for managing these cases, alongside their additional centrality, built up a few particular courts. The most significant of these was that of the chancellor as it built up its own statute. The Chancery started as the regal secretariat. Initially it was where imperial writs and sanctions were drawn and fixed. A great part of the chancellor’s later force originated from the way that he had care of the extraordinary seal of England, which was utilized to verify these records. Since the writs began from thi... ...  In the nineteenth century radical changes of the legal framework assaulted the viable blemishes of the chancery. In 1813 the incomparable intensity of the chancellor was checked by the arrangement of a bad habit chancellor. Afterward, this exertion was proceeded by expanding the intensity of the Master of the Rolls, and the cancelation of a significant number of the workplaces in the court. By lessening the spread of the court and by and by smoothing out business, seeks were after joining the two courts and, unequivocally, dispensing with the contention between them. Following 500 years, be that as it may, the chancery despite everything left a terrible preference for peoples’ mouths, and under Victorian enactment, the intensity of the incomparable courts was expanded to control the law and value: the chancery and the custom-based law courts were canceled, perpetually finishing the deep rooted question between the two. While the chancery was canceled, value has taken on a more extensive importance and still endures today in England and the US. It is that way to deal with equity giving progressively point of reference to specific realities of a case. Value is significant in light of the fact that it gave expanding assurance to the individual, and spoke to a splitting endlessly from the medieval thought of the almighty primitive master.

The Importance Of Being Earnest Essay Example For Students

The Importance Of Being Earnest Essay The Importance Of Being Earnest Essay centers around the first class, and keeping in mind that ridiculing their absurdities and overabundances, it likewise delights in their clever talk and raucous lives. Wilde was without a doubt an insightful social pundit, yet it is his mind that separates him. One of the manners in which Wildes mind shows itself is in plays on words. Running all through the whole play is the multifaceted nuance behind the word sincere, which capacities both as a male name and as a descriptor depicting earnestness. The plays exciting bends in the road around this subject, its characters lying so as to be Ernest, and afterward finding that in light of various momentous conditions they had not in reality been lying by any means. Obviously everybody in the group would be chuckling on the grounds that that is the idea of cleverness. This is the thing that the entire play, The Importance of Being Earnest is based around. The play additionally works flawlessly on how it is arrangement initially and brought through to turn into an exceptionally clever play at long last. Oscar Wildes utilization of Characterization is fundamentally appeared through the character Lady Bracknell. Woman Bracknell is an obstinate character who is somewhat overprotective of her little girl Gwendolen. Woman Bracknells character is essentially uncovered when she is addressing Jack before he is permitted by her to connect with Gwendolen, I feel bound to reveal to you that you are not down on my rundown of qualified youthful menhowever, I am very prepared to enter your name, should your answers be what an extremely warm mother requires. (Pg. 12) By utilizing the portrayal of Lady Bracknell, Oscar Wilde makes a bigger comedic influence in the play. In The Importance of Being Earnest, Oscar Wilde utilizes the character Algernon to delineate Satire. Algernon is an extremely presumptuous, narcissistic, and dishonest character who puts fault on anybody yet himself. The humorous effect of his character is put obtrusively on his concern of over-eating. In the event that Algernon has eaten something that he shouldn't, one of his hirelings removes him directly from inconvenience by concocting a rationalization. Here Algernon is being dishonest by advising Jack not to eat a cucumber sandwich and afterward eating one himself. If it's not too much trouble dont contact the cucumber sandwiches. They are requested uniquely for Aunt Augusta. Takes one and eats it. By utilizing the parody of Algernon, Oscar Wilde builds a significantly more clever play. All through the play, Oscar Wilde utilizes Satire and Characterization to make the hilarious influence work impeccably. The parody in the play would not work effectively if Oscar Wilde didn't make the portrayal of each character exact. On the off chance that Algernon was not self-important and gaudy, at that point there would be no parody on his part. In the event that Lady Bracknell was not over-defensive and headstrong, at that point there would be no parody on her part. The play would not work accurately if these two characters were not depicted unequivocally and were not ironical. Alongside parody and portrayal, the mind of Oscar Wilde defines a monstrous funniness influence all through the play. On the off chance that Oscar Wilde didn't have Algernon over-hear Jack and Gwendolen discussing where Jacks nation house is found, at that point the play would not turn out to be by any stretch of the imagination. It is Oscar Wildes mind that makes The Importance of Being Earnest work superiorly. In The Importance of Being Earnest by Oscar Wilde, portrayal, parody, and mind compare flawlessly to make a perfect amusing effect. This is essentially done through the characters Algernon and Lady Bracknell who through the mind of Oscar Wilde create the ideal silly play. .

Being global in business - Free Essay Example

A Discussion of the dual pressures faced by the MNE’s to think global, act local Introduction †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 2 Meshing the Realities to â€Å"Think Globally, and Act Locally† †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.†¦..†¦ 5 Conclusion †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦ 7 Bibliography .†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.†¦Ã¢â‚¬ ¦.†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦..†¦Ã¢â‚¬ ¦..†¦Ã¢â‚¬ ¦.†¦Ã¢â‚¬ ¦ 9 Introduction The Financial Times (1997) refers to an MNE as a company that operates as well as aspires to operate on an international scale and consequently thinks of its sales in terms of shares of the global marketplace rather than on a national or regional basis. Globalization, shareholder interests and competitiveness have created a climate where multinational enterprises (MNE’s) must expand or either be acquired and lose market share. To achieve such ends, they have resorted to attempting to standardize products, operating procedures, selling methodologies and approaches in what Levitt (1983, Pp 92-100) terms as homogenized operations. Global firms in today’s environment operate as a unified as well as consistent business system utilizing the proven Japanese platforms of just-in-time delivery, quality circles as well as continued improvement, and international corporations as a result have to transcend the considerations of local idiosyncrasies. However, recent experiences have found that said local and regional and national idiosyncrasies are in fact providing the opportunity to distinguish one’s products and firm from the bland me too image and capture the imagination as well as sales of local and national market segments. But, the requirement as well as need for multinational enterprises to â€Å"think global, act local† is not just bound in sales, it also constitutes a need to become a good corporate citizen. The preceding does not mean the sacrificing of profits for public opinion, rather it is a source via which to increase bottom line performance as the offering of services and or pro ducts in multiple markets and countries requires an understanding of the national dynamics, which are its people, customs and values (Watts et al, 2000). The premise for what seemingly is a radical approach is that business is an element of society, thus the two are interdependent (Watts et al, 2000, p. 3). We have arrived at this juncture as a result of the spread and influence of American multi national corporations since the end of World War II (Studer-Noguez, 2001, p. 2). The abuses of MNE power as evidenced by Monsanto, Cargill and Dow in agribusiness in developing countries, to companies such as Exxon, Chevron and other oil companies that undermine alternative energy forms as they drive pollution in the quest for profits are clear examples (Corporate Accountability International, 2005). MNE’s need to expand and increase market share as well as profits in a competitive environment that provides no quarter for the losers. At the same time such a singular vision can ser ve as the blinders that lead to a decrease in the forgoing through abuses, fraud, overbearing tactics and losing touch with the very foundation upon which their enterprises were built, to fill a need. Chakrabarty et al (1996, Pp 123-35) along with Bettis et al (1996, Pp 549-569) expressed, respectively, that how firms distribute, develop as well as deploy their accumulation of knowledge gained from cultural exchanges represent a major factor in the differences in performance and thus the contributing aspects of other organizational competencies and capabilities that define the differences in performance between corporations. European automotive firms such as Mercedes Benz and BMW, as well as Toyota, Honda and Nissan illustrate the foregoing. Contrary to the inwardly bound vision of American automotive forms General Motors and Ford, whose design and engineering focuses were tied to model obsolescence, these foreign automotive companies concentrated on slight model changeovers and quality thus resulting in lowered engineering costs through progression and higher overall quality whereby their vehicles out lasted and performed their American rivals (Studer-Noguez, 2001, Pp 73 97). They adapted their underpowered and under featured vehicles to fit the American preferences while maintaining their core competencies instead of copying the American automotive model and succeeded to the point where American made vehicles no longer dominate in their home market. The foregoing is maintained by Kostiva (1999, Pp 308-324) who states that the transference of organizational practices in a successful manner requires: a degree of distance, in terms of the corporation, between the locale and the headquarters office, a corporate culture that provides a degree of fit between the parent organization and the recipient, the attitude of the company with regard to openness for new ideas, and the dependency level of the subsidiary with respect to the headquarters company Chang (1995, Pp 383-407) adds that the foregoing learning process can potentially enable a company to overcome weaknesses it might have in terms of product or operating competencies and thus strengthen the company to be able to make inroads in markets where it lacked the operational foundation at the onset. The preceding aspects are important internal considerations as well as philosophies that companies must be open to in order to be receptive as well as responsive in meeting the new global dynamics as represented by international competitiveness. The preceding strikes a clear case for the fact that local influences and idiosyncrasies can add dimensions to a firm’s global competencies in product as well as operational and organizational terms. The American model of acquisition and continuing to operate in the manner that was successful in the home market represented poor sales results for General Motors as well as Ford in Europe until they changed their operational minds et (Studer-Noguez, 2001, Pp 73 – 97). The lessons go further than the outer manifestations as represented by product look, changes, adaptations and modifications to fit the demands and dictates of varied markets, it also requires an inward vision. Foreign subsidiaries must be mindful of that fact that corporate social responsibility interacts with the employees and communities in which the company markets and sells its goods or services, and this represents a substantial opportunity to gain valuable expertise as well as new methods of operation. Specifically, conclusions reached as a result of the World Business Council for Sustainable Development (Watts et al, 2000, p.4) found that: the recognition of corporate social responsibility as an aspect of human rights, along with employee rights, community, suppliers and environmental concerns, clear benefits are a result of a coherent corporate social responsibility strategy which utilizes integrity, values and a long term involvement, an opportunity for companies to utilize their own codes of conduct and core values along with the introduction and implementation of codes and values as represented by others, and the importance of the company being responsive to the cultural as well as local differences which are inherent in global business and international trade As provided in the examples as outlined for Mercedes-Benz and other European and Japanese vehicle manufacturers, the foregoing corporate social responsibility aspects can and do contribute to bottom line objectives thus presenting a framework that benefits stakeholders, shareholders and the local as well as national community in which the firm operates. Meshing the Realities to â€Å"Think Globally, and Act Locally† The achievement of the maxim of ‘thinking globally and acting locally’ is not a result that will occur of and on its own, it requires that the firm take a proactive stance to encourage and implement methodologies to cause this to happen. Lee (1999, Pp 37-44) states that the approaches to achieving the foregoing can be accomplished through: the utilization of explicit policies and a reward system which encourages the gathering, discussion, modification and utilization of knowledge gained with respect to local and national markets, having flexible corporate policies and systems in place that provide the platform for local adaptations to be received, aired, tried and implemented, policies in the human resource arena that permit as well as encourage the training, placement and utilization of local managers through a system of position and departmental rotations, a culture within the company and organization that is mindful of as well as supports the participation and input of subsidiaries, a communications platform that consists of formal as well as informal information transfer that is open to the sharing and discussion of information, The foregoing can achieve measurable results, thus eliminating the perceived notion that the introduction of socially responsive actions are negative factors in bottom line performance. Salk et al (1996, Pp 877-904) state that the preceding can be measured by the instance in which concepts are acquired in a range of areas, such as new technology applications and expertise, marketing approaches, product development, knowledge of consumer tastes, preferences, management and human resource techniques as well as manufacturing processes. Salk et al (1996, Pp 877-904) indicate that in order for the preceding to occur, the corporate climate has to be open as well as receptive to learning and evaluating, rather than utilizing a tunnel vision approach that the way things have been done are or is the way things should be done. The preceding is a variant of what Schon et al (1996, Pp 121-145) refer to as single loop learning, whereby a company continues to utilize existing routines and knowle dge as well as structures. Levinthal et al (1990, Pp 128-152) point out that the preceding is detrimental in that it does not provide for or contribute to increased or enhanced learning within the organization, and thus renewal or re-examination. Ghoshal et al (1998, Pp 464-476) indicate that the preceding can be enhanced through the establishment of social networks which help to provide for a smooth transition as well as exchange of new knowledge and information within an organization. Globalisation has the tendency to blur the vision of a corporation to the importance of the individual markets and their local customs, cultures and contributions as a part of the bigger picture. The fact remains that multinational enterprises have to remember that they are a product of their home culture and as such must resist exporting this as a commodity that does not blend, adapt and modify itself based upon the realities of the global stage. The notion that multinationals need to act and res emble their home country based upon reasons ranging from brand or consistency has some validity, but not at the expense of forcing these values upon foreign operations and locations. As the success of various corporations captures the consciousness of the business world, the tendency to emulate their practices is a natural outgrowth (Morris, 1995, Pp 25-42). Corporations in the United States, Europe and Asia need to be aware and mindful that their dominance in terms of their percentage of world trade tends to make them compete on regional terms bringing with it the attitude that their views and approaches represent the edge that contributes to their successes. The emergence of the huge trading blocks represented by the United States – Mexico and Canada, the European Union and Asia – China is causing global trade to develop a more regionalized view in terms of expansion as firms within these blocks seek to capitalize on the inherent opportunities that exist in close pro ximity to their home operations (Verbeke et al, 2004, Pp 3-18). Conclusion The continually shifting fortunes of international trade, forces multinational enterprises to define and redefine themselves in keeping with the dictates and demands of seeking and maintaining a competitive edge. This global view is an inherent aspect of maintaining growth in keeping with the demands of shareholder and corporate objectives. However, as shown by the examples of the American automotive companies, General Motors and Ford, a limited perspective with regard to world markets and thinking globally can leave a company without the understanding or knowledge of what is occurring in national and local markets that are imperative in capturing the minds of prospective consumers. By tapping into this cultural foundation companies stand to benefit from an increased understanding of what consumers want in their own local and national worlds, which differs from a global vision. Thinking globally and acting locally is not a trend, fad or phase that represents a new philosophy, it is a strategic initiative that is based in the realities of the demands and dictates that different markets demand customized approaches that can only be gained via corporate structures and process organized to recognized, evaluate and accept them. The processes of bottom line, growth and market share are not at odds with local dictates, consumer preferences and corporate social responsibilities, in fact they are integral aspects of the process of being a global company. Perhaps David Lilienthal’s (1985) definition provides the clearest insight â€Å"†¦ corporations which have their home in one country but operate and live under the laws and customs of other countries as well†. The operative thought in Lilienthal’s (1985) definition is â€Å"†¦ laws and customs of other countries as well†. It provides a clear perspective for ‘thinking globally and acting local ly’! Bibliography Bettis, R., Lei, D., Hitt, M. (1996) Dynamic Core Competencies Through Meta-Learning and Strategic Context. Vol. 22, Issue 4. Journal of Management Chakrabarty, A., Bierly, P. (1996) Generic Knowledge Strategies in the U.S. Vol. 17. Strategic Management Journal Chang, S. (1995) International Expansion Strategy of Japanese Firms. Vol. 38. Academy of Management Journal Corporate Accountability International (2005) Current Campaigns. https://www.stopcorporateabuse.org/cms/index.cfm?group_id=1000 Financial Times (1997) The Global Company, Business on the World Stage. October – November 1997. Financial Times Ghoshal, S., Tsai, W. (1998) Social Capital and Value Creation: The Role of Intrafirm Networks. Vol. 41. Academy of Management Journal Kostova, T. (1999) Transnational Transfer of Strategic Organizational Practices. Vol. 24. Academy of Management Review Lee, J. S. (1999) Organizational Learning in China. Vol. 42, Issue 1. Bus iness Horizons Levitt, T. (1983) The Globalization of Markets. Vol. 61, Issue 3. Harvard Business Review Levinthal, D., Cohen, W. (1990) Absorptive Capacity: A New Perspective on Learning and Innovation. Vol. 35. Administrative Science Quarterly Lilienthal, David (1985) Management and Corporations. April 1985. Symposium at the Graduate School of Industrial Administration, Carnegie Institute of Technology Morris, J., Innes, E. (1995) Multinational corporations and employee relations. Vol. 17, Issue 6. Employee Relations Salk, J., Lyles, M. (1996) Knowledge Acquisition from Foreign Parents in International Joint Ventures. Vol. 27. Journal of International Business Schon, D., Argyris, C. (1996) Organizational Learning II: Theory, Method and Practice. Addison Wesley. ISBN: 0201629836 Studer-Noguez (2001) Global Strategies of MNE’s and Government Policies. 1st Edition. Routledge. ISBN: 0415205794 Watts, Phil, Holme, Richard, Tinto, Rio (2000) Corporate soci al responsibility: making good business sense. January 2000.World Business Council for Sustainable Development, Geneva, Switzerland Verbeke, A., Rugman, AS. (2004) A Perspective on Regional and Global Strategies of Multinational Enterprises. Vol. 35, Issue 1. Journal of International Business Studies

Obsessive Compulsive Disorder ( Ocd ) - 1321 Words

Rebecca Howell In the field of Psychology there are a number of psychological disorders as well categories in which these disorders are placed. Psychological disorders are categorized in the Diagnostic and Statistical Manual of Mental Disorders; the manual is now in its fifth edition, which is known as the DSM-5. In the DSM-5, Obsessive-Compulsive Disorder is categorized with other compulsive disorders. Obsessive-Compulsive disorder, also known as OCD, is a condition â€Å"marked by persistent, uncontrollable intrusions of unwanted thoughts or obsessions and urges to engage in senseless rituals called compulsions† (Weiten, 2015). Some examples of these obsessions or urges include persistent hand washing, counting, and extensive checking such as if doors are locked or ovens are turned off. In OCD some of the actions performed by those who suffer from the disorder become very intrusive and become a factor that interrupts their daily lives and may cause problems at home, work, in relations hips and more (Baldridge, 2016). The number of individuals who suffer from this disorder ranges form 2 to 3 percent of the population (Weiten, 2015). People typically begin suffering from OCD between late childhood and early adulthood (Baldridge, 2016). The onset of Obsessive-Compulsive Disorder often occurs following a stressful life event (Baldridge, 2016). In order to meet the criteria for Obsessive-Compulsive Disorder the compulsions and obsessions must cause distress and cause anShow MoreRelatedObsessive Compulsive Disorder (OCD)1756 Words   |  8 Pages Obsessive Compulsive Disorder (OCD) is a disorder that can affect children and adults. In order to fully understand OCD, many different areas of the disorder must be reviewed. First, OCD will be defined and the diagnosis criteria will be discussed. Secondly the prevalence of the disorder will be considered. The different symptoms, behaviors and means of treatment are also important aspects that will be discussed in o rder to develop a clearer understanding of the implications of obsessive compulsiveRead MoreEssay on Obsessive Compulsive Disorder (OCD)875 Words   |  4 Pagessevere Obsessive Compulsive Disorder. Obsessive-compulsive disorder is an anxiety disorder that triggers people to have unwanted fixations and to repeat certain activities again and again. Everyone has habits or certain ways of doing something with Obsessive Compulsive Disorder these habits severely interrupt the way they live their lives (Familydoctor.org Editorial Staff). About one in 40 people suffer from some form of Obsessive Compulsive Disorder (ABRAMOWITZ). Obsessive Compulsive Disorder oftenRead MoreLiving With Obsessive Compulsive Disorder (OCD)1190 Words   |  5 Pagesdifferences between both symptoms and experiences of six different authors who have been personally affected by obsessive-compulsive disorder (OCD).   Since OCD is not very well understood by many members of the public (Escape), I hope that the experiences of the authors that I researched will be able to paint a vivid picture of what life with OCD is like. Obsessive-compulsive disorder involves a chemical imbalance in the brain. This chemical imbalance is thought to be the main reason for obsessionsRead MoreObsessive Compulsive Disorder (OCD) Essay2901 Words   |  12 Pages   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Obsessive Compulsive Disorder, or OCD, affects an average 1.7% of the population according to the Stanford University School of Medicine.  Ã‚  The recognition of this psychological disorder has grown in the recent years.  Ã‚  As the knowledge of this disorder becomes more prevalent, those suffering have become more willing to seek help (OCDA).   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  OCD is a condition â€Å"in which people experience repetitive and upsetting thoughts and/or behaviors† (OCDA).  Ã‚  While there are many variationRead MoreObsessive Compulsive Disorder (OCD) Essay800 Words   |  4 Pages Obsessive Compulsive Disorder And Its Effect On Life Obsessive-compulsive disorder, or OCD, involves anxious thoughts or rituals one feels and cant control. . For many years, OCD was thought to be rare. The actual number of people with OCD was hidden, because people would hide their problem to avoid embarrassment. Some recent studies show that as many as 3 million Americans ages 18 to 54 may have OCD at any one time. This is about 2.3% of the people in this age group. It strikes men and women inRead More Obsessive Compulsive Disorder (OCD) Essays2616 Words   |  11 Pagesis a very powerful piece of structure; it is truly limitless when speaking about its potential. With a functional organ comes a dysfunctional possibility. Obsessive Compulsive Disorder, (OCD), for instance, is nervousness in the mind. OCD is an anxiety disorder caused by repetitive intrusive thoughts and behaviors. It is a mental disorder marked by the involvement of a devotion to an idea or routine. Essentially, it is a false core belief which is believing that there is something wrong, causingRead MoreEssay on Obsessive Compulsive Disorder (OCD)3370 Words   |  14 Pages Obsessive compulsive disorder is a disease that many people know of, but few people know about. Many people associate repeated washing of hands, or flicking of switches, and even cleanliness with Obsessive Compulsive Disorder (OCD), however there are many more symptoms, and there are also explanations for those symptoms. In this paper, I will describe what obsessive compulsive disorder is, explain some of the effects of it, and explain why it happens. I will also attempt to prove that while medicationRead More Obsessive Compulsive Disorder (OCD) Essay1758 Words   |  8 PagesOCD: Whats in Control? Obsessive Compulsive Disorder (OCD) is an anxiety disorder that is the fourth most common mental illness in the U.S. (8). OCD affects five million Americans, or one in five people (3). This is a serious mental disorder that causes people to think and act certain things repetitively in order to calm the anxiety produced by a certain fear. Unlike compulsive drinking or gambling, OCD compulsions do not give the person pleasure; rather, the rituals are performed to obtainRead MoreObsessive Compulsive Disorder (OCD) Essay examples1375 Words   |  6 PagesObsessive Compulsive Disorder â€Å"I know my hands are clean. I know that I have touched nothing dangerous. But†¦ I doubt my perception. Soon, if I do not wash, a mind numbing, searing anxiety will cripple me. A feeling of stickiness will begin to spread from the point of contamination and I will be lost in a place I do not want to go. So I wash until the feeling is gone, until the anxiety subsides. Then I feel defeated. So I do less and less, my world becomes smaller and smaller and more lonelyRead MoreEssay about Obsessive Compulsive Disorder (OCD)474 Words   |  2 Pages Obsessive Compulsive disorder (OCD) is a mental illness that effects nearly 5 million Americans, and half a million children. Its a disease that fills the brain with unwanted ideas, and worries. OCD is a diseases that effects the Cerebral frontal cortex. Unfortunately there is no cure for OCD. Obsessive compulsive disorder can start developing as early as age five. In most cases OCD controls your life. Through out the rest of this paper I hope to inform you on Obsessive compulsive Disorders

U.s. Foreign Agricultural Production - 1492 Words

The U.S. has always been an importer of commodities that cannot be cultivated here such as bananas, mangos, cocoa and coffee. However, the U.S. has begun to import products that Americans are used to growing themselves. According to Phillip Abbot, a professor of agricultural economics at Purdue University, â€Å"the problem is that other nations have successfully grabbed the markets U.S. farmers were counting on. Exports of the U.S. s biggest commodities such as corn, soybeans and wheat have been flat for a decade as other nations boost production. At the same time, imports of pricier items like fruits, vegetables, processed foods and some meats are surging. The largest challenge for American farmers is that agricultural products can be†¦show more content†¦The USDA is working to enhance productivity and ensuring the safety of the food supply. It invests in research of new varieties and technologies to mitigate animal/plant diseases and increase productivity, sustainabilit y, and product quality. This research has supported American farmers in their work to produce a safe and abundant food supply. The USDA is also working on improving nutrition and confronting obesity by developing effective education activities to promote health and reduce malnutrition and obesity in children and high-risk populations. Conserving natural resources and combating climate change is also a main focus. Scientists are developing rice and corn crops that are drought and flood resistant and helping to improve the productivity of soil, as well as production systems that require less pesticides. The USDA is delivering science based information to farmers and ranchers which will help them make informed decisions and improve practices in environmental conservation. According to the United States Census Bureau the average educational level in the U.S. has increased in the past two decades. In 1995, 81.7 percent of adults were high school graduates and 23 percent

Cost and Management Sustainability Factor

Question: Discuss about the Cost and Management for Sustainability Factor. Answer: Introduction: The university management does not have to reveal the way of spending money, which makes it hard to calculate the exact cost required to educate the students.As per the websitereport ofnews.com.au, the universities have to spend a lot of money than the authority get from the government funding and the student fees.According to the opinion of Edgington (2015),5-10% funding of the students fees is being guided away from the education process and preferred sustaining the research actions of the universities. Calculation of cost is also essential to regulate the entire education system while providing teaching guidance and the other research tactics to the students. The students have been charged excessive fees, so that the universities can provide an further research to the students (Baporikar, 2009). As per the Higher Education and Reform Bill 2014, the universities have made frequent complaints of being underfunded in the absenteeism of cost indication. In the case of university unit costing per student is required to determine the suitable fee levels. In the opinion of Amos (2010), comparison of cost alternatives is essential for delivering a particular cost to the students. The Activity-Based Cost analysis is also helpful to carry out the calculation of cost per student. The chain activities guided by the teaching practitioners help to maintain the records of the assignments and records the marked assignments. It has been speculated that the recorded marks of the students file are maintained in a computerised database. As per the report of Deloitte Access Economics, the higher educating learning and teaching costs, in the year 2010 is $15,000 normally to educate a student with a particular degree program. The students have to handle the claims from the tutors and issues regarding the payments. As per the view of Brown and Carasso (2013),the full of cost of each marked assignment is the measure of the services provided by the unive rsities or institution as per the received payment. The students have to offer the overall expenditure for the related activities. According to the report of the Australian Bureau of Statistics, about 41% of academic university research endowment in the year of 2012 (approximately $3.7 billion) arrived from a medium that was not exclusive for the purpose of research (Culliney, 2014). It also includes the investment revenue, donations, contributions and the profits from the commercial operations of the university. The students taking admition from the foreign region, who pay much higher fees rather than the Australian students, are specifically prejudiced by the global positional tables. The difficulties associated with undertaking the calculations It is very difficult to calculate the cost of the education for a different student from the different domain. Apart from the ongoing debates concerning the university deregulation factors and its long-standing sustainability factor, the universities are more unenthusiastic to disclose its cost charged by a student during the entire course. As per the opinion of Potcharapanpong and Thongthew (2010),the student fees of the university wrap the expenditure of the course depending on the stream and subject matter. For an example, Edgington(2014) added that for medicine or veterinary degrees the general cost of the entire course is relatively higher compared to the other subjects like law, accounts, etc. The course of medical degree needs more equipment or research to educate a student for this particular degree. On the other hand, Jing (2014) mentioned that the course of law or accounting does not need this kind of equipment or additional research to conduct the entire course. Hence, the course fees of medical students are much higher rather that the students of accounting and law. The cost of course is also various based on the university tend and the impressive institutions tends to pay more on the research. Considering the opinion of Edgington(2015),a highly regarded academics can develop the teaching efficiency. On the other hand, it has been speculated that the research regarding the specific course needs a particular amount which cannot be quantifiable. The chargeable amount for the different course cannot be enumerated, which can be a trouble for calculating the cost of the course. Furthermore, in the opinion of Culliney (2014), the digital educational marketplace is the other example of the expensive cost of the education structure. On the other hand, the four year degree is highly long and expensive for the students as well as the universities. The process of learning of the different universities is different from each other which is the foremost reason to construct a general calculation for the course structure(Clarke, 2008). The instalment break up of the universities are framed in a narrow format which sometimes become difficult for the students to pay the university fees within the short time farmed (Brown and Rahn-Blakeslee, 2009).The technical issues regarding the education infrastructure could hamper the cost analysis of the course. On the other, it has been analysed that the education is the not the most ultimate focus of the universities. The selling of a business, students lifestyles, accommodation expenditure and the administration scholarship are the major factors to create difficulties in the costing of education. Australian National University is fortunate to have a Nobel Prize winner that turned up useful to attract both the universities and students(Callejo-PeÃÅ' rez and Ode, 2013). The report of news.com.au indicates that the international student fees are presently being used to subsidies the education practitioners and the course related examine cost in the universities. The responsibility of governing authority on the university funding actions There are a large number of appraisals for the university division that can define the necessity of the calculations to provide a reliable basis for the decision making process. According to the opinion of Brown and Carasso (2013),the Go8s call is significant to review the payment structure of the payments. This policy is comprised both of the major parties like the students and the universities. It has been observed that all the universities receive the similar amount of funding from the administration for the each lessons and course. Adding to this, the students of the university are equally paying the course fees as per the course structure. In the opinion of Broad and Goddard (2010),the universities could reduce the course fees, so that the university could get maximum number of students footfall in the college campus. Furthermore, both the students an the university authority needs to work jointly to offer a long term sustainable position in the university division. On the other hand, Baporikar(2009) added that the funding cost provided by the government to the universities is often cut depending on its actual cost to deliver the final process. It has been identified that the cuts announced in the Labours final budget in the year of 2013, may have lost the faith of the majority of the vice-chancellors from the funding system(Amos, 2010).Although,it has been assessed that the government appreciation and funding is highly required for a university forimproving the overall education system. Adding to this, the as per the report of news.com.au, the independent senator Nick Xenophon has voted for the deregulation of the billing system of the universities. Thus, the government has to make another review before funding the universities along with that an alternative opinion has to be given as its radical deregulation reforms. On the other hand, Culliney (2014) argued that the executive directors of the Regional Universities Network is not excited about the process of another assessment. It has been speculated that the executive directors has proposed the deregulation model to motivate the government contributors. Therefore, it would be possible to reduce the student fees, which, would assist to increase the number of students in the universities. References: Amos, S. (2010).International education governance. Bingley, UK: Emerald. Baporikar, N. (2009).Management education. Mumbai [India]: Himalaya Pub. House. Broad, M. Goddard, A. (2010) Internal performance management with UK higher education: An amorphous system?, Measuring Business Excellence, 14(1), 6066. Brown, R. Carasso, H. (2013) Everything for sale? The marketisation of UK higher education. London: Taylor Francis. Brown, S. Rahn-Blakeslee, A. (2009) Training school-based practitioners to collect intervention integrity data, School Mental Health, 1(3), 143153. Callejo-PeÃÅ' rez, D. Ode, J. (2013).The stewardship of higher education. Rotterdam: Sense Publishers. Clarke, J. (2008) Book review: Motivating your team: Coaching for performance in schools,Management in Education, 22(3), 3839 Culliney, T.W. (2014) Notes on predatory Behavi our in Rhinacloa forticornis (Hemiptera: Miridae ), Current Agriculture Research Journal, 2(1), 0104. Edgington, U. (2015). Performativity and accountability in the UK education system: a case for humanness.Pedagogy, Culture Society, 1(1), 1-6. Jing, L. (2014) The governments roles in transnational forest governance, Recht der Werkelijkheid, 35(3), 120 -122. Potcharapanpong, S. Thongthew, S. (2010) TEFL training program for local and cultural-based instruction: Case studies in Thai primary schools, Asian Social Science, 6(9), 657-695.

Management Accounting Project Report Cvp Analysis for a Firm Under Expansion Phase Essay Example

Management Accounting Project Report Cvp Analysis for a Firm Under Expansion Phase Essay The CVP analysis helps in taking more than one decisions in a firm. How would you substantiate this statement for a unit under expansion phase| | Abstract Companies commonly face major uncertainties in their product markets, particularly in the manufacturing industry where competition is often fierce and consumer tastes change rapidly. Managers need to estimate future revenues, costs, and profits to help them plan and monitor operations and to decide the mix and volumes of goods or services to produce and sell. They also use this information to evaluate profitability risk. Cost-volume-profit (CVP) analysis is the technique used to identify the levels of operating activity needed to avoid losses, achieve targeted profits, plan future operations, decide on expansion or contraction plans, monitor organizational performance and analyze operational risk as they choose an appropriate cost structure to help in the decision making process to sustain the firm. Table of Contents Introduction4 Marginal Cost Equations and CVP Analysis9 Cost Volume Profit (CVP) Relationship in Graphic Form14 Applications of Cost Volume Profit (CVP) Concepts17 CVP Analysis Illustrations Unit in Expansion Mode19 Illustration 119 Illustration 222 References28 Introduction To assist planning and decision making, management should know not only the budgeted profit, but also: * the output and sales level at which there would neither profit nor loss (break-even point) * the amount by which actual sales can fall below the budgeted sales level, without a loss being incurred (the margin of safety) In marginal costing, marginal cost varies directly with the volume of production or output. On the other hand, fixed cost remains unaltered regardless of the volume of output within the scale of production already fixed by management. We will write a custom essay sample on Management Accounting Project Report Cvp Analysis for a Firm Under Expansion Phase specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Management Accounting Project Report Cvp Analysis for a Firm Under Expansion Phase specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Management Accounting Project Report Cvp Analysis for a Firm Under Expansion Phase specifically for you FOR ONLY $16.38 $13.9/page Hire Writer In case if cost behaviour is related to sales income, it shows cost-volume-profit relationship. In net effect, if volume is changed, variable cost varies as per the change in volume. In this case, selling price remains fixed, fixed remains fixed and then there is a change in profit. Being a manager, you constantly strive to relate these elements in order to achieve the maximum profit. Cost – Volume profit Analysis is a logical extension of Marginal costing. It is based on the same principles of classifying the operating expenses into fixed and variable. CVP analysis is generally defined as a planning tool by which managers can evaluate the effect of a change(s) in price, volume, variable cost or fixed cost on profit. Additionally, CVP analysis is the basis for understanding contribution margin pricing, related short-run decisions, target costing and transfer pricing. Apart from profit projection, the concept of Cost-Volume-Profit (CVP) is relevant to virtually all decision-making areas, particularly in the short run. The relationship among cost, revenue and profit at different levels may be expressed in graphs such as breakeven charts, profit volume graphs or in various statements forms. CVP Analysis helps managers understand the interrelationship between cost, volume, and profit in an  organization  by focusing on interactions among the following five elements:   1. Prices of products 2. Volume or level of activity 3. Per unit variable cost 4. Total fixed cost 5. Mix of product sold Earning of maximum profit is the ultimate goal of almost all business undertakings. Profit depends on a large number of factors, most important of which are the cost of manufacturing and the volume of sales. Both these factors are interdependent. Volume of sales depends upon the level of production i. e. volume of production and market forces which turns in related to costs. Management has no control over market. In order to achieve certain level of profitability, it has to exercise control and management of costs, mainly variable cost. This is because fixed cost is a non-controllable cost. In other words, it helps in locating the level of output which evenly breaks the cost and revenues used. In its broader sense, it means that system of analysis which determines profit, cost and sales value at different levels of output i. . it establishes the relationship of cost, volume and profit. CVP Analysis helps to find out the profitability of a product, department of division to have better product mix, for profit planning and to maximize the profit of a concern. The decisions can include such crucial areas as pricing policies, product mixes, market expansion or contractions, outsourcing contracts, idle plant usage, discretionary e xpenses planning and a variety of other important considerations in the planning process. Thus cost volume profit analysis furnishes the complete picture of the profit structure. When the firm is in expansion phase, Funds are provided for the major expansion of a company which has increasing sales volume and which is breaking even or which has achieved initial profitability. Funds are utilized for  further plant expansion, marketing, and working capital  or for development of an  improved product, a  new technology, or an  expanded product line. Cost-volume-profit analysis can answer a number of analytical questions. These include, for example: 1. What products to manufacture or sell? 2. What pricing policy to follow? 3. What marketing strategy to employ? 4. What type of productive facilities to acquire? Cost-volume-profit analysis can also answer many other â€Å"what if† type of questions. Cost-volume-profit analysis is one of the important techniques of cost and management accounting. Although it is simple, it is a powerful tool for planning of profits and therefore, of commercial operations. It provides an answer to â€Å"what if† theme by telling the volume required to be produced. Following are the three approaches to a CVP analysis: * Cost and revenue equations * Contribution margin * Profit graph Before going into further details on the above three approaches below is described, the broad objectives of CVP analysis and the assumptions thereof n attaining these objectives. Further the limitations of the CVP analysis are detailed, which will help determine when, where and in which situations CVP analysis can be applied effectively in the various decisions that a firm needs to make to continue functioning. Objectives of Cost-Volume-Profit Analysis 1. In order to fo recast profits accurately, it is essential to ascertain the relationship between cost and profit on one hand and volume on the other. 2. Cost-volume-profit analysis is helpful in setting up flexible budget which indicates cost at various levels of activities. . Cost-volume-profit analysis assists in evaluating performance for the purpose of control. 4. Such analysis may assist management in formulating pricing policies by projecting the effect of different price structures on cost and profit. Assumptions Following are the assumptions on which the theory of CVP is based: 1. The changes in the level of various revenue and costs arise only because of the changes in the number of product (or service) units produced and sold, e. g. , the number of television sets produced and sold by Sigma Corporation. The number of output (units) to be sold is the only revenue and cost driver. Just as a cost driver is any factor that affects costs, a revenue driver is any factor that affects revenue. 2. Total costs can be divided into a fixed component and a component that is variable with respect to the level of output. Variable costs include the following: * Direct materials * Direct labor * Direct chargeable expenses Variable overheads include the following: * Variable part of factory overheads * Administration overheads * Selling and distribution overheads 3. There is linear relationship between revenue and cost. 4. When put in a graph, the behavior of total revenue and cost is linear (straight line), i. e. Y = ax + b holds good which is the equation of a straight line. 5. The unit selling price, unit variable costs and fixed costs are constant. 6. The theory of CVP is based upon the production of a single product. However, of late, management accountants are functioning to give a theoretical and a practical approach to multi-product CVP analysis. 7. The analysis either covers a single product or assumes that the sales mix sold in case of multiple products will remain constant as the level of total units sold changes. . All revenue and cost can be added and compared without taking into account the time value of money. 9. The theory of CVP is based on the technology that remains constant. 10. The theory of price elasticity is not taken into consideration. Many companies, and divisions and sub-divisions of companies in industries such as airlines, automobiles, chemicals, plastics and semiconductor s have found the simple CVP relationships to be helpful in the following areas: * Strategic and long-range planning decisions * Decisions about product features and pricing In real world, simple assumptions described above may not hold good. The theory of CVP can be tailored for individual industries depending upon the nature and peculiarities of the same. For example, predicting total revenue and total cost may require multiple revenue drivers and multiple cost drivers. Some of the multiple revenue drivers are as follows: * Number of output units * Number of customer visits made for sales * Number of advertisements placed Some of the multiple cost drivers are as follows: * Number of units produced * Number of batches in which units are produced Managers and management accountants, however, should always assess whether the simplified CVP relationships generate sufficiently accurate information for predictions of how total revenue and total cost would behave. However, one may come across different complex situations to which the theory of CVP would rightly be applicable in order to help managers to take appropriate decisions under different situations. Limitations of Cost-Volume Profit Analysis The CVP analysis is generally made under certain limitations and with certain assumed conditions, some of which may not occur in practice. Following are the main assumptions and limitations therein of the cost-volume-profit analysis: 1. It is assumed that the production facilities anticipated for the purpose of cost-volume-profit analysis do not undergo any change. Such analysis gives misleading results if expansion or reduction of capacity takes place. 2. In case where a variety of products with varying margins of profit are manufactured, it is difficult to forecast with reasonable accuracy the volume of sales mix which would optimize the profit. 3. The analysis will be correct only if input price and selling price remain fairly constant which in reality is difficult to find. Thus, if a cost reduction program is undertaken or selling price is changed, the relationship between cost and profit will not be accurately depicted. 4. In cost-volume-profit analysis, it is assumed that variable costs are perfectly and completely variable at all levels of activity and fixed cost remains constant throughout the range of volume being considered. However, such situations may not arise in practical situations. . It is assumed that the changes in opening and closing inventories are not significant, though sometimes they may be significant. 6. Inventories are valued at variable cost and fixed cost is treated as period cost. Therefore, closing stock carried over to the next financial year does not contain any component of fixed cost. Inventory should be valued at full cost in reality. Sensitivity Analysis or What If Analysis and Uncertainty Sens itivity analysis is relatively a new term in management accounting. It is a â€Å"what if† technique that managers use to examine how a result will change if the original predicted data are not achieved or if an underlying assumption changes. In the context of CVP analysis, sensitivity analysis answers the following questions: 1. What will be the operating income if units sold decrease by 15% from original prediction? 2. What will be the operating income if variable cost per unit increases by 20%? The sensitivity of operating income to various possible outcomes broadens the perspective of management regarding what might actually occur before making cost commitments. Marginal Cost Equations and CVP Analysis Break even is the level of sales at which the profit is zero. Cost volume profit analysis is some time referred to simply as break even analysis. This is unfortunate because break even analysis is only one element of cost volume profit analysis. Break even analysis is designed to answer questions such as  How far sales could drop before the company begins to lose money? † From the marginal cost statements, one might have observed the following: Sales – Marginal cost = Contribution(1) Fixed cost + Profit = Contribution(2) By combining these two equations, we get the fundamental marginal cost equation as follows: Sales – Marginal cost = Fixed cost + Profit(3) This fundamental marginal cost equation plays a vital role in profit projection and has a wider application in managerial decision-making problems. The sales and marginal costs vary directly with the number of units sold or produced. So, the difference between sales and marginal cost, i. e. contribution, will bear a relation to sales and the ratio of contribution to sales remains constant at all levels. This is profit volume or P/V ratio. Thus, P/V Ratio (or C/S Ratio) = Contribution (C)Sales (S) (4) It is usually expressed in terms of percentage, P/V ratio = (C/S) x 100 Contribution = Sales x P/V ratio(5) Sales = Contribution (C)PV Ratio(6) The above-mentioned marginal cost equations can be applied to the following heads: 1. Contribution Margin Contribution margin  is the amount remaining from sales revenue after variable expenses have been deducted i. e. difference between sales and marginal or variable costs. Thus it is the amount available to cover fixed expenses and then to provide profits for the period. The concept of contribution helps in deciding breakeven point, profitability of products, departments etc. to perform the following activities: * Selecting product mix or sales mix for profit maximization * Fixing selling prices under different circumstances such as trade depression, export sales, price discrimination etc. CVP analysis can be used to help find the most profitable combination of variable costs, fixed costs, selling price, and sales volume. Profits can sometimes be improved by reducing the contribution margin if fixed costs can be reduced by a greater amount. The contribution margin as a percentage of total sales is referred to as contribution margin ratio (CM Ratio). Contribution margin ratio can be used in cost-volume profit calculations. 2. Profit Volume Ratio (P/V Ratio), its Improvement and Application The ratio of contribution to sales is P/V ratio or C/S ratio. It is the contribution per rupee of sales and since the fixed cost remains constant in short term period, P/V ratio will also measure the rate of change of profit due to change in volume of sales. The P/V ratio may be expressed as follows: P/V Ratio = Sales-Marginal Cost of SalesSales ContributionSales = Changes in ContributionChanges in Sales = Change in ProfitChange in Sales A fundamental property of marginal costing system is that P/V ratio remains constant at different levels of activity. A change in fixed cost does not affect P/V ratio. The concept of P/V ratio helps in determining the following: * Breakeven point * Profit at any volume of sales * Sales volume required to earn a desired quantum of profit * Profitability of products * Processes or departments The contribution can be increased by increasing the sales price or by reduction of variable costs. Thus, P/V ratio can be improved by the following: * Increasing selling price * Reducing marginal costs by effectively utilizing men, machines, materials and other services * Selling more profitable products, thereby increasing the overall P/V ratio 3. Breakeven Point Breakeven point is the volume of sales or production where there is neither profit nor loss. Thus, we can say that: Contribution = Fixed cost Now, breakeven point can be easily calculated with the help of fundamental marginal cost equation, P/V ratio or contribution per unit. a. Using Marginal Costing Equation S (Sales) – V (Variable cost) = F (Fixed cost) + P (Profit) At BEP P = 0, i. e. BEP Sales – V = F By multiplying both the sides by S and rearranging them, one gets the following equation: Sales at BEP = F. S/S-V b. Using P/V Ratio Sales (S) at BEP = Contribution at BEPP/V Ratio = Fixed CostP/V Ratio c. Using Contribution per unit Breakeven Point = Fixed Cost/Contribution per unit 4. Margin of Safety (MOS) Every enterprise tries to know how much above they are from the breakeven point. This is technically called margin of safety. It is calculated as the difference between sales or production units at the selected activity and the breakeven sales or production. Margin of safety is the difference between the total sales (actual or projected) and the breakeven sales. It may be expressed in monetary terms (value) or as a number of units (volume). It can be expressed as profit / P/V ratio. A large margin of safety indicates the soundness and financial strength of business. Margin of safety can be improved by lowering fixed and variable costs, increasing volume of sales or selling price and changing product mix, so as to improve contribution and overall P/V ratio. Margin of safety = Sales at selected activity – Sales at BEP = Profit at selected activityP/V Ratio Margin of safety is also presented in ratio or percentage as follows: Margin of Safety SalesSales at selected activity ? 100% The size of margin of safety is an extremely valuable guide to the strength of a business. If it is large, there can be substantial falling of sales and yet a profit can be made. On the other hand, if margin is small, any loss of sales may be a serious matter. If margin of safety is unsatisfactory, possible steps to rectify the causes of mismanagement of commercial activities as listed below can be undertaken. . Increasing the selling price It may be possible for a company to have higher margin of safety in order to strengthen the financial health of the business. It should be able to influence price, provided the demand is elastic. Otherwise, the same quantity will not be sold. 2. Reducing fixed costs 3. Reducing variable costs 4. Substitution of existin g product(s) by more profitable lines e. Increase in the volume of output 5. Modernization of production facilities and the introduction of the most cost effective technology 5. Degree of Operating Leverage Managers decide how to structure the cost function for their organizations. Often, potential trade-offs are made between fixed and variable costs. For example, a company could purchase a vehicle (a fixed cost) or it could lease a vehicle under a contract that charges a rate per mile driven (a variable cost). One of the major disadvantages of fixed costs is that they may be difficult to reduce quickly if activity levels fail to meet expectations, thereby increasing the organization’s risk of incurring losses. The degree of operating leverage is the extent to which the cost function is made up of fixed costs. Organizations with high operating leverage incur more risk of loss when sales decline. Conversely, when operating leverage is high an increase in sales (once fixed costs are covered) contributes quickly to profit. The formula for operating leverage can be written in terms of either contribution margin or fixed costs, as shown here Degree of operating leverage in terms of contribution margin = Contribution marginProfit = Total Revenue-Total Variable CostProfit P-VQProfit Degree of operating leverage in terms of fixed costs = FProfit+1 Managers use the degree of operating leverage to gauge the risk associated with their cost function and to explicitly calculate the sensitivity of profits to changes in sales (units or revenues): % change in profit = % change in sales x Degree of Operating leverage Managers need to consider the degree of operating leverage when they decide whether to incu r additional fixed costs, such as purchasing new equipment or hiring new employees. They also need to consider the degree of operating leverage for potential new products and services that could increase an organization’s fixed costs relative to variable costs. If additional fixed costs cause the degree of operating leverage to reach what they consider an unacceptably high level, managers often use variable costs—such as temporary labour—rather than additional fixed costs to meet their operating needs. Cost Volume Profit (CVP) Relationship in Graphic Form Apart from marginal cost equations, it is found that the relationships among revenue, cost, profit and volume can be expressed graphically by preparing a  cost-volume-profit (CVP) graph or break even chart. Breakeven chart and profit graphs, which is a development of simple breakeven chart and shows clearly profit at different volumes of sales, are useful graphic presentations of the cost-volume-profit relationship. Breakeven chart is a device which shows the relationship between sales volume, marginal costs and fixed costs, and profit or loss at different levels of activity. Such a chart also shows the effect of change of one factor on other factors and exhibits the rate of profit and margin of safety at different levels. A breakeven chart contains, among other things, total sales line, total cost line and the point of intersection called breakeven point. It is popularly called breakeven chart because it shows clearly breakeven point (a point where there is no profit or no loss). Construction of a Breakeven Chart The construction of a breakeven chart involves the drawing of fixed cost line, total cost line and sales line as follows: 1. Select a scale for production on horizontal axis and a scale for costs and sales on vertical axis. 2. Plot fixed cost on vertical axis and draw fixed cost line passing through this point parallel to horizontal axis. 3. Plot variable costs for some activity levels starting from the fixed cost line and join these points. This will give total cost line. Alternatively, obtain total cost at different levels; plot the points starting from horizontal axis and draw total cost line. 4. Plot the maximum or any other sales volume and draw sales line by joining zero and the point so obtained. Uses of Breakeven Chart A breakeven chart can be used to show the effect of changes in any of the following profit factors: * Volume of sales * Variable expenses * Fixed expenses * Selling price A CVP graph or breakeven chart thus highlights CVP relationships over wide ranges of activity and can give managers a perspective that can be obtained in no other way. Profit Graph Profit graph is an improvement of a simple breakeven chart. It clearly exhibits the relationship of profit to volume of sales. The construction of a profit graph is relatively easy and the procedure involves the following: 1. Selecting a scale for the sales on horizontal axis and another scale for profit and fixed costs or loss on vertical axis. The area above horizontal axis is called profit area and the one below it is called loss area. 2. Plotting the profits of corresponding sales and joining them. This is profit line. Limitations and Uses of Breakeven Charts A simple breakeven chart gives correct result as long as variable cost per unit, total fixed cost and sales price remain constant. In practice, all these factors may change and the original breakeven chart may give misleading results. But then, if a company sells different products having different percentages of profit to turnover, the original combined breakeven chart fails to give a clear picture when the sales mix changes. In this case, it may be necessary to draw up a breakeven chart for each product or a group of products. A breakeven chart does not take into account capital employed which is a very important factor to measure the overall efficiency of business. Fixed costs may increase at some level whereas variable costs may sometimes start to decline. For example, with the help of quantity discount on materials purchased, the sales price may be reduced to sell the additional units produced etc. These changes may result in more than one breakeven point, or may indicate higher profit at lower volumes or lower profit at still higher levels of sales. Nevertheless, a breakeven chart is used by management as an efficient tool in marginal costing, i. e. in forecasting, decision-making, long term profit planning and maintaining profitability. The margin of safety shows the soundness of business whereas the fixed cost line shows the degree of mechanization. The angle of incidence is an indicator of plant efficiency and profitability of the product or division under consideration. It also helps a monopolist to make price discrimination for maximization of profit. Applications of Cost Volume Profit (CVP) Concepts CVP analysis thus involves the analysis of how total costs, total revenues and total profits are related to sales volume, and is therefore concerned with predicting the effects of changes in costs and sales volume on profit. The technique used carefully may be helpful in the following situations: a) Budget planning. The volume of sales required to make a profit (breakeven point) and the safety margin for profits in the budget can be measured. b) Pricing and sales volume decisions. c) Sales mix decisions, to determine in what proportions each product should be sold. d) Decisions that will affect the cost structure and production capacity of the company. e) Make or buy decisions – Analyzing and determining whether it is profitable for a firm to manufacture a particular component or product themselves, outsource the production to others or buy a component/product already available for their use. ) To decide whether or not to close down a factory, department, product line or other activity, either because it is making losses or because it is too expensive to run. This often involves long term considerations, and capital expenditures and revenues. But it can be simplified into short run decisions, by making certain assumptions. g) Assist in determining production or activity levels of employee s and their work schedules. h) Assist in determining discretionary expenditures and product emphasis such as advertising. While this type of analysis is typical for manufacturing firms, it also is appropriate for other types of industries. In addition to the restaurant industry, CVP has been used in decision-making for nuclear versus gas- or coal-fired energy generation. Some of the more important costs in the analysis are projected discount rates and increasing governmental regulation. At a more down-to-earth level is the prospective purchase of high quality compost for use on golf courses in the Carolinas. Greens managers tend to balk at the necessity of high (fixed) cost equipment necessary for uniform spread ability and maintenance, even if the (variable) cost of the compost is reasonable. Interestingly, one of the unacceptably high fixed costs of this compost is the smell, which is not adaptable to CVP analysis. Even in the highly regulated banking industry, CVP has been useful in pricing decisions. The market for banking services is based on two primary categories. First is the price-sensitive group. In the 1990s leading banks tended to increase fees on small, otherwise unprofitable accounts. As smaller account holders have departed, operating costs for these banks have decreased due to fewer accounts; those that remain pay for their keep. The second category is the maturity-based group. Responses to changes in rates paid for certificates of deposit are inherently delayed by the maturity date. Important increases in fixed costs for banks include computer technology and the employment of skilled analysts to segment the markets for study. Even entities without a profit goal find CVP useful. Governmental agencies use the analysis to determine the level of service appropriate for projected revenues. Nonprofit agencies, increasingly stipulating fees for service, can explore fee-pricing options; in many cases, the recipients are especially price-sensitive due to income or health concerns. The agency can use CVP to explore the options for efficient allocation of resources. Project feasibility studies frequently use CVP as a preliminary analysis. Such major undertakings as real estate/construction ventures have used this technique to explore pricing, lender choice, and project scope options. Cost-volume-profit analysis is a simple but flexible tool for exploring potential profit based on cost strategies and pricing decisions. While it may not provide detailed analysis, it can prevent do-nothing management paralysis by providing insight on an overview basis. CVP Analysis Illustrations Unit in Expansion Mode In an expanding market, managers take advantage of fixed costs to generate profitable growth as additional customers do not add much additional costs. In such cases cost structure dominated by fixed cost structure is a smart managerial decision. Whenever a decision is to be taken as to whether the capacity is to be expanded or not, consideration should be given to the following points: * Additional fixed expenses to be incurred * Possible decrease in selling price due to increase in production * Whether the demand is sufficient to absorb the increased production Based on these considerations, the cost schedule will be worked out. While deciding about the contraction of business, the saving in fixed expenses and the marginal contribution lost will have to be taken into account. If a branch office is to be closed down, and if the branch is giving a marginal contribution sufficient to cover fixed expenses the contraction may lead to a loss. Example: Branch B Sales – `20000 P/V Ratio – 20% Marginal contribution – `4000 Fixed expenses of the branch – `3000 The branch is giving an extra contribution of `1000. If it is closed, the fixed expense saving is `3000, whereas the contribution lost is `4000. Hence it is not advisable to contract the business by closing down the branch. Illustration 1 Nice and Warm Ltd. , manufactures and markets hot plates. During the first five years of operation, the company had experienced a gradual increase in sales volume, and the current annual growth in sales of 5% is expected to continue into the foreseeable future. The plant is now producing at its full capacity of one lakh hot plates. At the monthly Management Advisory Committee meeting, amongst other things, the plan of action for next year was discussed. Managing Director proposed two alternatives. First, operations could be continued at full capacity and with the existing facilities an output of one lakh hot plates at a selling price of `100 per unit could be maintained. Secondly, production and sales could be increased by 5% to take advantage of the rate of expansion in demand for the product. But this could increase cost, as to achieve this output the company will have to resort to weekend and overtime workings. However, a policy of steady growth was preferable to maintaining status quo. In view of the company’s competitors having a substantial share of the market, the Works Director was of the view that it was not enough for the company to maintain merely the present share of the total market. A larger share of the total market should be obtained. For that, the company should increase the production by 10% through a modest expansion of plant capacity. In order to sell the output of 110000 units, the selling price could be reduced to `95 per unit. Thinking on the same lines, the Marketing Director put forth a more radical proposal. The strategy should be to seize the competitive leadership in the market with regard to both price and volume. With this end in view, he suggested that the company should straight away embark on an expensive modernization programme which will initially increase volume by 20%. The entire output of 120000 hot plates could be easily sold at a price of `90 per unit. At this juncture Managing Director expressed concern about the probable behavior of the company’s competitors. They might also expand in order to produce more and sell at lowest prices. Suppose this happened, he wanted also the financial effects of the proposals of the Works Director and the Marketing Director, if in those proposals, the incr