1. 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.

  2. 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 !

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