# Cost Volume Profit Analysis ACCA F5 Lecture part 2

1. 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

• 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.

• says

Yes – of course (we only leave current material on the website )

Remember that you need to download the free Lecture Notes if you are watching the lectures because they use the examples in the notes.

2. says

hi sir,
Do we have to learn three or just learning one approach for Multi-product breakeven chart enough?

• says

I don’t know what you mean by three! Everything covered in this lecture can be asked (and has been asked).

• says

In the BPP textbook there were 3 approaches for dealing with multi product breakeven..So i was asking if learning one was enough or 3 of them were necessary..Sorry if this question is not supposed to be asked here.

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I do not know what the BPP textbook says!
What is covered in this lecture is what is needed for the exam

3. 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

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

• 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. 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.

• says

At the moment, the only lecture on short term decision making is on relevant costing (which is the most important of the topics in this chapter).

• says

Yes of course.
However if CVP is asked then almost certainly the question will specifically ask for the graph.

5. says

I am fully confident that I will pass F5 in this attempt and this confidence of becuse of open tuition. thanks again.

6. says

Thanks you so much sir , thanks to you and your whole team of open tuition . May God gives a great success in your positive plans in future.