- This topic has 3 replies, 2 voices, and was last updated 1 year ago by John Moffat.
June 3, 2016 at 9:20 am #319058Jana
- Topics: 30
- Replies: 18
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:
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.
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!June 3, 2016 at 10:59 am #319094John MoffatKeymaster
- Topics: 57
- Replies: 50606
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 🙂June 2, 2021 at 2:52 pm #622783Lahjnation
- Topics: 0
- Replies: 1
Indicate the nature of the violation and the extent to which the CVP chart can be adapted to allow for this violation.June 2, 2021 at 4:30 pm #622811John MoffatKeymaster
- Topics: 57
- Replies: 50606
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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