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Where is it that we need to use weighted average contribution? Does this need to be used or can another method be used instead? Perhaps all methods need to be known incase they specifically ask for this to be used in the question?
For example I have learnt to work out the contribution per mix and then multiply the amount of units of each different product by the number of mixes. However in the new textbook that I have (i.e. I studied F5 a few years ago) it uses the weighted average contribution per unit instead.
Thanks
The only way you need is the way that is shown in my lecture (which is the way the examiner used in both her article and in the one exam question she has asked).
I haven’t read any of the articles yet. Which specific article is this?
I’ve had a brief look at them but can only see reference to standard mix and not contribution per mix. Also the articles that I can see on the ACCA site are written by a ‘member of the Paper F5 examining team.’ I’m assuming that this is approved by the examiner.
What is the one exam question that you are referring to?
I came across this topic where the weighted average contribution (WAC) was used in the December 2011 Exam Question 5. Two methods were shown but the second which was using WAC was described as showing the individual variances for each material that are meaningful. To be honest I do not fully understand how they got these answers, perhaps you could cover this question in a lecture if you get time.
Thanks
I had assumed that you were asking about CVP analysis, whereas it seems that you are actually asking about mix and yield variances.
There have been several questions on mix and yield – it is a popular topic – and mix and yield variances are already covered in full in our free lectures.
There are two ways of arriving at the same answers (you will never be asked specifically to calculate weighted average contribution) and it does not matter which method you use – either would get full marks. The best method to use is the one that is explained in our lectures.
Does this come under CVP analysis as well as Mix and Yield variances then?
I have seen a lot of questions on Mix and Yield and will need to go over this again.
I’m sure that the method in the lectures is the way that I have done this in the past. I sat the F5 Exam in June 2012 but unfortunately failed and have only picked up studying these topics again a couple of months ago. Last time I didn’t have your website and expertise to help me!
I really appreciate your efforts and with a bit more work I hope that I can pass this time around!
CVP analysis is completely different, but it does involve calculations of an average contribution ratio.
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