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CVP Multi Product Graphs

Forums › Ask CIMA Tutor Forums › Ask CIMA P1 Tutor Forums › CVP Multi Product Graphs

  • This topic has 1 reply, 2 voices, and was last updated 8 years ago by Cath.
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  • January 11, 2017 at 11:23 am #366036
    jforrest19
    Member
    • Topics: 7
    • Replies: 1
    • ☆

    Apologies, if this is a stupid question (more general prep for resit P1).

    On a multi product CVP graph, are the products in order of the highest contribution earned? (eg product with the highest contribution is 1st, 2nd highest 2nd etc).

    January 11, 2017 at 7:16 pm #366087
    Cath
    Participant
    • Topics: 0
    • Replies: 446
    • ☆☆☆

    Hi- no need to apologise -I am here to help you -it’s no problem 🙂
    When the p/v line on graph is drawn more like a curve with slopes at different gradients -then this means the products are assumed to be sold in order of highest individuak c/s ratio first.
    However, when the P/V line is drawn as a perfectly straight line -this represents breakeven & profit/loss areas- if the products are sold in their budgeted sales quantities (at standard mix).
    Hope that helps.

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