Abstract In this article, the author responds to comments by some accounting experts on his general decision model for CVP analysis. The author says that he would like to respond briefly to optimization function first, and then to point out a few implications of his model formulation for the stochastic break-even analysis as a final wrap-up of my two Replies. The author wishes to point out that the model formulation developed in his paper could be extended and applied to the break-even analysis under uncertainty in which the production quantity would play a significant role. The value of the term Q, quantity, of course, can be decided in a variety of ways depending on the goals and objectives of the top management. It is clear that the production quantity Q now enters the stochastic break-even analysis as a factor in the determination of the lower bound of the mean demand. This is a significant departure from the traditional break-even analysis, and thus may be viewed as a potential for future research.

Abstract The article presents the reply of the author to the article by D.R. Finley, assistant professor of accounting and Woody M. Liao, associate professor of accounting, published in the April 1981 issue of the journal "The Accounting Review," on author's general decision model. According to the author, the decision criteria developed by Finley and Liao for determining a product's marketability under normally distributed demand is a valid and smooth integration of equations derived in author's paper. Their decision criterion calls for a positive expected profit as a precondition for marketing a product. Such an approach to the break-even analysis under uncertainty has several major limitations. The first major limitation is that their decision criterion failed to take into account the decision maker's attitude toward risk-taking. The second major limitation of the choice criterion proposed by Finley and Liao is that it is a very pessimistic and highly inflexible approach. Such a negative and rigid view of uncertainty, will certainly be detrimental to the expansion and development of any business endeavors.