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Dear Sir,
Some times it is asked in the question of CVP analysis to calculate the lowest sales revenue needed to breakeven, I want to ask whether in this scenario, would we prefer the product with highest C/S ratio or the product with highest Contribution Per Unit?Secondly, I want to ask whether it is necessary to show the workings of Ratios we calculate in Performance measurement questions. Would we get full marks if we just plug-in the correct ratio?
Thank you.
We close the products in the order of the highest CS ratio.
For questions in section A and B workings are not needed because they are marked by computer and nobody looks at your workings.
For questions in Section C, if you get the correct answer then you get the marks even if there are no workings. However it is as well to show your workings because even if you make a silly mistake and the answer wrong then you will still get some marks if it is clear from your workings that you were trying to do it correctly.
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