A Comment on Shih's General Decision Model for CVP Analysis.

Amy Hing-Ling Lau; Hon-Shiang Lau

doi:10.2308/tar-4481997

A Comment on Shih's General Decision Model for CVP Analysis.

Amy Hing-Ling Lau¹; Hon-Shiang Lau²

¹ Assistant Professor of Accounting, Washington State University 1 · ² Professor of Management, Washington State University. 2

The Accounting Review 1981

ABSTRACT: Shih [1979] recently proposed a general decision model for CVP-analysis under uncertainty, and he presented three major results for the model: (1) derivation of profit's probability distribution, (2) formulas for computing profit's mean and variance, and (3) formulas for determining the production quantity to maximize the probability of achieving a target profit. The purpose of this Comment is to present simpler and more general formulas for Shih's problems (2) and (3). These formulas considerably enhance the practicality of Shih's model.

DOI: 10.2308/tar-4481997
Volume: 56 (4)
Pages: 980-983
Language: en
Export: BibTeX
Sources: openalex crossref