ACCA F5 Lecture – Pricing Part 2b
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You have provided an understanding to Pricing. My heartfelt thanks.
Thank you sir for the great job you’re doing.
Could it be possible that variances in price and demand are not given?
If yes, how should we figure them out?
I am not sure exactly what you are asking.
You are usually not given variances – the whole point is for you to calculate the variances!
In example5, for instance “a reduction in selling price of $1 will result in additional sales of 100 units”. what should we do in the case where we don’t have this data?
Sorry – I completely misunderstood you 馃檨
If you are required to produce the price/demand equation, then you have to be given that data in one form or another.
Thank you very much. 馃檪
Dear sir,
Ex 06, to calculate the profit, which analysis should we use, Key factor analysis or throughput accounting, thank you
Neither!
Key factor analysis and throughput accounting are only relevant when there is a limit on the resources available and several products to choose from. None of those factors are relevant here.
Once the demand and associated selling price have been calculated, all the information is available to calculate the profit.
Sir,
(Ex 06, when calculating contribution per annum you deduct variable cost from selling price and then deduct the fixed cost. why do we deduct both variable cost and fixed O/H to calculate the profit. please help sir
Profit is revenue less all costs.
Contribution is revenue less variable costs.
Profit is contribution less fixed costs.
Variable costs are those where the total changes with the level of production. Fixed costs are those there the total stays the same for all levels of production.
Thank u for the lecture.
MR = dTR / dQ ; Here I understood that algebra involved to arrive at the answer. But I am unable to understand the logic behind (MR = dTR / dQ). Please kindly explain.
The marginal revenue is the extra revenue that will be generated from selling one extra unit. Because the total revenue is a curve, the marginal revenue will fall with higher demand.
As you will know from our Course Notes and my lecture, you cannot be asked to differentiate in the exams – it is excluded from the syllabuses throughout the ACCA exams.
That is why the equation for the marginal revenue is given on the formula sheet.
Your lectures are concise and succinct, and I have benefited immensely. Thank you very much for everything, sir.
Thank you 馃檪
hi , May i know where is the marginal revenue equation is given in question number 6 ?
The formula for the marginal revenue (MR) is given on the formula sheet that you get with the exam.
Kind of having a hard time with the formulas bit of the lecture, but it is not because they are not clearly explained, I guess I just need to practice more.
I am just surprised that as I am already taking a course somewhere else, there was no mention of these formulas on the topic of pricing, they only taught basic things plus the pricing strategies, I wonder if pricing is not that common in the exam and that’s why they didn’t go in deep as it is explained in here?
Pricing does get asked every three or four exams. I am surprised if you are not being shown the formulae since you are given them in the exam on the formula sheet.
Oh! so it is actually a common topic. I saw the formula yet there was no great explanation about it, I also came across it obviously in F2. Also there was no talk whatsoever on MC and MR and all of that. I am glad I checked here for this extra bit.
It is no longer examinable in Paper F2, which makes it slightly more likely at F5 (although it is not so often at F5)
May I ask when was it removed from the F2 syllabus? Because I took my F2 exam last December so it is not long time back, I wonder if they taught it to me while it was out of the syllabus already!!!!!
Also I have another question and I am sorry if I am asking too many questions, but i would like to know if the price elasticity of demand is within the F5 syllabus, will I be expected to calculate the elasticity of products and so? I do have a basic idea about it from F1 and I believe I could answer a writing question on it as long as it is basic question but I am not sure if it is within the syllabus and if I am supposed to be aware of it. I am asking this because I found one question on it within my kit.
Thank you very much and apologies for any disturbance.
Yes – it is in the syllabus 馃檪
I guess I have been studying the things which are not in the syllabus and leaving the topics included in the syllabus !!!
Thank you for all the clarifications!! 馃榾
very in-sighting. God bless you
Nice one. Open Tuition Rocks!
Brilliant lecture thank you. i however am struggling to find past exam questions to do some more exercises any ideas?
I only found Qs in the dec 2007 q1 .
Tks
can any body help me..is pricing strategies(cost plus price,marginal cost plus price) are also included in this chapter…..in some books its included?
Cost plus pricing (full cost + and marginal cost +) is in the syllabus and is (of course) covered in our notes and lectures on here.
(It is more of a policy than a strategy, but that does not really matter.
Thank u – brilliant
by examles it is so much easier to remember.
Very clear illustration, thanks very much tutor!
I really enjoyed the lecture and the lecturer’s way of explanaing things but still want a detail explanations on Price elasticity of demand. The ones you taught were well understood. Thanks.
good explanation
very very good Lecturer.
Well explained…. thanks OT
@bayigga, really