• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

New! BPP Books for ACCA September 2022 Exams are now available, get your discount code >>

Breakeven in Multi-Product

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › Breakeven in Multi-Product

  • This topic has 3 replies, 2 voices, and was last updated 8 months ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • October 11, 2021 at 4:14 pm #637466
    Natasha1996
    • Topics: 34
    • Replies: 22
    • ☆☆

    1) How do we calculate BE units with multi-product? We can calculate BE revenue by an average basis by taking the (total contribution / total revenue) of all the products and use that C/S ratio to calculate BE revenue?

    2) Is it true that with multi-product CVP analysis we can calculate Breakeven Revenue by calculating the C/S ratio (Total Contribution / Total Sales) of all the products, But we can’t calculate Breakeven Units since the Fixed cost given is the total of all units produced so it is not possible to calculate Breakeven units (such as in example 6)?

    October 12, 2021 at 7:15 am #637519
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 49583
    • ☆☆☆☆☆

    I explain both of these in my free lectures working through the chapter on CVP analysis.

    October 12, 2021 at 11:02 am #637544
    Natasha1996
    • Topics: 34
    • Replies: 22
    • ☆☆

    I already watched ur lecture that’s why I was asking about these queries. Is this below all correct?

    1) In Single-Product CVP we can calculate Breakeven units; Breakeven revenue; Margin of Safety; C/S ratio; because we have fixed cost incurred which belongs to one product only so it is easier to calculate everything.

    2) BUT with Multi-Product CVP we cannot calculate Breakeven units; Margin of Safety; because we have fixed cost incurred which belongs to more than one product (so we don’t know which product has how much fixed cost) so it is not possible to calculate them.

    3) But we can calculate Breakeven revenue; C/S ratio by taking Average figures (i.e. Total Figures). So we calculate BE revenue by taking Average Figures such as (Total Contribution / Total Sales revenue) to get C/S ratio of all the products.

    4) Although we can only use the Average C/S ratio to calculate BE revenue rather than BE units because we don’t know the individual Fixed cost of each product?

    October 12, 2021 at 3:41 pm #637575
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 49583
    • ☆☆☆☆☆

    Yes, all of that is correct.

  • Author
    Posts
Viewing 4 posts - 1 through 4 (of 4 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

Donate

If you have benefited from OpenTuition please donate.

Specially for OpenTuition students

20% off BPP Books

Get BPP Discount Code

Latest comments

  • Alistair02 on MA Chapter 1 Questions Accounting for Management
  • AymanR7 on Practice Question Klopp
  • Kyle on Translation of the subsidiary – ACCA (SBR) lectures
  • John Moffat on Discounting, Annuities, Perpetuities – ACCA Management Accounting (MA)
  • Joanne94 on Discounting, Annuities, Perpetuities – ACCA Management Accounting (MA)

Copyright © 2022 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in


We use cookies to show you relevant advertising, find out more: Privacy Policy · Cookie Policy