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CVP analysis multiple products

JJana10y ago
Hi Sir John, I discovered that we can calcualte the breakeven point in two ways: 1)average contribution to sales ratio or 2) Based on budget sales: computation trough breakeven point in terms of number of mixes, b/even in terms of number of products, b/even in terms of revenue. I must say that the first Average c/S ratio computation seems to me too long! Question:How is it working at the exam, does examinator let us choose the method? Next Question on the page 77/BPP Manual - Company PL 5.1 Calculating the ration (see also section 4.1) My Q: I didn't understant how they arrived to the mixed ration 7/10and 3/10 in step 6: Calculate breakeven sales: M=$58,442 *7/10=$40,909. N=$58,442*3/10=$17533. Q:Why they didn't mulptiply only brakeven point with the number of mixes? Q: Do I need to follow exactly the Steps as per Manual BPP page 77 1 ) Calculate the revenue per mix until Step 6) Calculate Breakeven Sales in the exam? Next Q: I watched your video about multiple CVP and I think they you were using the other method, based on Budget Sales , more straight forward, so you didn't use average contribution C/S ratio, did you? In video you have these following points: 1) Computation of C/S ratio per unit and total C/S ratios. 2) Average C/S ratios - based on budget sales, and total budget contribution 3) Computation of Budget Sales Revenue per product, and total Revenue. 4)Computation C/S ratio. 5) Computation Breakeven and Total revenue=F/C / C/S ratios. 6)P/V chart 7) table Q: I don't understand how you were drawing the chart for each product. So, do you start with first point on the chart with F/C?, F/c and 0 [0;F/C]? then you were adding the sales volume according Ranking - first P (12,000*$7)=84,000. And on the Y axis: (12,000*$2.65=$31,800) Q: So, the co-ordinates of P are [84,000;31,800]? co-ordinates of C are [24,000;6000] co-ordinates of V are [28,800;3,600]? And then I put these points on the chart and draw a line between them. Is it correct? Thank you very much for your answer!
John MoffatJohn MoffatTutor10y ago#1
First question: Yes - it doesn't matter which way you do it Second question: Sorry but I don;t have the BPP Study Text Third question: I did use the average CS ratio but I calculated is using total budget contribution and total budget sales Fourth and fifth questions: correct :-)
AAlhaji5y ago#2
Indicate the nature of the violation and the extent to which the CVP chart can be adapted to allow for this violation.
John MoffatJohn MoffatTutor5y ago#3
What you have typed makes no sense at all on its own. Presumably it is part of a longer question. If you are referring to the same question as in Jana's post, then I have already stated that I do not have the BPP Manual and therefore I have no idea whatsoever of what violation you are referring to. If you are referring to a different question then if it is a past exam question or is in the BPP Revision Kit then tell me which one and then I will explain. If it is part of a question that you have been given as an exercise, then sorry but we are not here to do your homework for you :-)
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