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Sir Please i want to know when calculating BEP in revenue under multi product, is it always fixed costs divided by C/S Ratio. I’m asking this because when i watched your lectures on CVP Analysis on single product, when finding for the BEP in value, u divided fixed cost by contribution per unit and multiplied the answer by the selling price per unit. i want to know for the BEP in value weighted average is it always fixed costs divided by C/S Ratio.
Dividing by the contribution and multiplying by the selling price is the same as dividing by the CS ratio.
Hi
Thank for this wonderful revision.
I wanted to ask, on my calculations I did everything the same as you did except when I left the answer as 0.61 instead of 60.92%
As a result, my answer for question B is then actually 1577508.20 because of the rounding off.
In the CBE exam, does this mean I will not actually get the full marks although I did all the calculations and formulas correctly?
You would still get full marks unless the question specifically said what rounding to use.
Thank you John,
Instead of using the cost per unit and the selling price per unit, i used the total cost and total revenue and had the same answer. Am i correct?
Yes – no problem 馃檪
Hey John, for part A i did not multiply the number of units but managed to get the same contribution to sales ratio.
W.A.C = 972+1084+869
S.P per unit = 1600+1800+1400
= 2925/4800
= 0.61 = 61%.
Would this be wrong? Thanks ahead!
That is fine – it gives the same answer!
Dear sir,
Why we don’t minus fixed cost of 55,000 in calculation of contribution (a)?
Contribution is defined as the profit before any fixed costs (i.e. revenue less variable costs)!
Have you watched my free lectures on CVP analysis? The lectures are a complete free course for Paper F5 and cover everything needed to be able to pass the exam well.
Yes this is my mistake. Thank you for your prompt reply. I have watched all your lecture F5 and now I practice more by myself. I still have problem to understand and remember variance
You are welcome 馃檪
Thanks John for the brilliant lectures .
sir ,are we suppose to graph the total cost with the Y axis or the X axis
since the Y axis depicts revenue and cost and the X axis depicts the sale unit
pls. kindly explain
Thanks
I don’t understand what you are asking.
The x- axis should the units, and the y-axis shows both the revenue and the total costs.
(You can no longer be asked to draw any graphs in the exam, but there could be a graph given in the question and you are expected to be able to interpret it)