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CVP analysis

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › CVP analysis

  • This topic has 1 reply, 2 voices, and was last updated 8 years ago by John Moffat.
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  • Author
    Posts
  • February 13, 2017 at 7:15 am #372155
    kitse
    Member
    • Topics: 13
    • Replies: 8
    • ☆

    multiproduct CVP analysis assumes that there is a predetermined sales mix (ie budgeted) and that this sales mix will remain constant ie 2:1.

    “…in reality, this constant mix ie 2:1 is unlikely to exist…such changes in the mix throughout a period, even if the overall mix for the period is 2:1 will lead to the actual breakeven point being different than anticipated”

    Why? if the overall mix for the period is the same as the budgeted, why should the BEP be different?

    February 13, 2017 at 9:47 am #372191
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54680
    • ☆☆☆☆☆

    If the mix was different at different points during the period, then they could possibly breakeven sooner during the period.

    Have you watched the free lectures on CVP analysis? (The lectures are a complete free course for Paper F5).

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  • The topic ‘CVP analysis’ is closed to new replies.

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