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In an expression involving exponentiation, a negative quantity can be raised to a power only if the exponent is an integer. (Do not confuse the exponent in an arithmetic expression with the exponent that is a part of a single- or double-precision real constant.) To understand this restriction, we must see how exponentiation is carried out. If the exponent is an integer quantity, the quantity to be exponentiated is multiplied by itself an appropriate number of times. But if the exponent is not an integer quantity, Visual Basic computes the logarithm of the quantity being exponentiated, multiplies this logarithm by the exponent, and then computes the antilog. Since the logarithm of a negative number is not defined, we see that the operation is invalid if the quantity being exponentiated is negative.

Similarly, a business manager should plan ahead for all the activities of the business that is, the manager should develop a set of budgets for sales, production, selling and administrative expense, and financial requirements. As indicated in the standard-cost system, the actual results of various activities can be compared to the budgeted or planned results. Analysis of the variances found will then help the manager make reasonable and thoughtful decisions. These analytical methods direct cost, standard-cost variance analysis, and budget planning and control are ways of putting costaccounting information to good use. The manufacturer can make decisions on the basis of information provided by these analytical tools. There are, however, several other important ways of analyzing costs and profits. Two of these break-even analysis and incremental analysis are discussed in the following sections.

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Sales forecasts are uncertain at best. For this reason, it is important for management to know approximately what cost changes can be expected to go along with volume changes. It must know what levels of production and sales volume are necessary for profitable operation. It must know how much effort and cost are justified to keep volume at a high level. Break-even analysis provides this sort of information. Break-even analysis is so called because the focal point of the analysis is the break-even point the level of sales volume at which revenues and costs are just equal. At this level, there is neither profit nor loss.

CHAPTER 6:

A break-even chart is illustrated in Fig. 11.1. A break-even chart can be prepared from budget figures and knowledge of capacity levels.

When the program is executed, the Open dialog box appears, as shown in Fig. 9.58. Once data file Teams.dat is selected, the first record is displayed, as shown in Fig. 9.59(a). Any changes to this record can then be entered within the appropriate text box, as shown in Fig. 9.59(b), where the number of losses has been increased from 4 to 5. Clicking on the Update button then causes the new values to be saved to the data file. The next record then appears, as shown in Fig. 9.60. (The user may also click on the Next button, which results in the next record being displayed without saving the values from the previous record.) The process continues until the last record has been processed, resulting in the controls being disabled, as shown in Fig. 9.61.

This system rewards agile companies that take advantage of Google s strategies and technologies. With modest budgets and highly optimized accounts, they can beat large corporations with unlimited budgets. Google is pushing its PPC methods into all forms of advertising, which may end up restructuring the way companies do marketing. This is similar to the so-called Walmart effect. Every week, about half of the U.S. population shops at Walmart. With such a large share of consumer retail, Walmart can dictate to manufacturers how they will package and price their products. If a manufacturer doesn t comply, Walmart won t carry their products. Google is putting a similar pressure on companies. If companies want to sell via search engines, they must write and manage their ad campaigns according to Google s formulas and they must build their web pages according to Google s criteria for relevancy. Just as with Walmart, companies can certainly do whatever they like, but they won t be on the shelves at Walmart or at the top of Google. It s their choice not to be available to the bulk of consumers.

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