Comments

  1. Profile photo of prishan says

    Thank you Sir… Really appreciate your noble cause of giving knowledge without charging on a world run on just money. Should nominate to CNN Heroes for you outstanding teaching skills and the efforts you take to make us understand. I’m sure you have made lot of people comprehend some difficult topics. May God Bless you and the open tuition team.

  2. avatar says

    I am sure that i am mistaked but I have heard that you call 8,000 of fixed costs as contribution. my understanding is that breakeven revenue= fixed overhead/cs ratio. for example for P =8,000/37.9% but contribution for P itself is different number and should not be taken into account for calculating brealeven revenue for P? Please explain as i am confused . thanks

    • Profile photo of John Moffat says

      You must have either misheard me or misunderstood me.

      Breakeven occurs when the profit equals zero, which is when total contribution equals the fixed costs.
      That is the reason that the breakeven revenue is equal to the fixed costs / CS ratio.

  3. avatar says

    Hello sir,

    Example 6 -part d – calculate break even revenue. Can you please explain why technique below doesnt work :(

    Breakeven revenue =breakeven volume x S.P

    Break even volume = 8000/4.65 (total cont/unit for all products) = 1720 units

    So, 1720 x $18 (total S.P for all products) = 30,967

    i was hoping the answer would be the same as yours, but its not. Please tell me where I went wrong.

    Thanks a lot.

    D

    • Profile photo of John Moffat says

      The problem is that you cannot use the total contribution – you need to use the weighted average contribution per unit.

      If you watch the free lecture then you will see how I get the answer to this example (you must not study using just the course notes – it is in the lectures that we go through the examples and explain more. If you are unable to watch the lectures then there is no choice but to buy a Study Text and study from there.)

  4. Profile photo of Nikhil says

    Hello Mr Moffat,

    I really love all your lectures and I personally think you are the best teacher I must have come across in my time. No lecturer at my college is as good as you. I was wondering if by any chance you could upload lecture for Short Term decision making. Or if they are available elsewhere, that would be great to know.

    Thanks again for your efforts.

  5. Profile photo of mario123 says

    Would like to point out a mistake sir! I just noticed that in the last part in example 6, where its been asked to calculate the cumulative profits and sales, you’ve accidentally calculated the cumulative contribution and not profit. Or was it deliberate?

    • Profile photo of mario123 says

      Because I distinctly remember you telling in the lecture that the graph of Profit-Volume has profits mentioned and not contribution. So then why is this cumulative contribution plotted on the graph alongside the profts?

      • Profile photo of John Moffat says

        The answer is correct and does show the cumulative profit.

        We make P first and the profit is the contribution from P, less the fixed overheads of $8,000.

        We then make C. The fixed overheads will not change, and so the total profit will increase by the extra contribution generated by C.

        We then make V. Again, the fixed overheads will not change and the total profits will therefore increase by the extra contribution generated by V.

  6. avatar says

    Once again, really really well explained, Thank you Sir. I wish our college tutor would have been so good when i was doing my performance management paper towards AAT qualification.
    OT and all the Tutors are brilliant !

  7. avatar says

    thank u very much for such a great lecture..i have failed f5 twice :'( i have bad lecturers they dont explain the way u do.i like the fact that u explained y u calculating something u dont just use formulas..sir are they any tips u can give me so i can pass f5..

    thank u

    • Profile photo of John Moffat says

      The only tip I can give you is to work through as many questions as you can (get hold of a Revision/Exam Kit from one of the ACCA approved publishers).
      Especially concentrate on the written parts of the questions. 50% of the exam will be written as against calculations. Too many people just do the calculations and write little or nothing for the written parts – they are then only being marked out of 50% !!

      Make sure you really understand everything and that you are not just learning rules. Learning rules does not help with the written parts.

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