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REV CUM/SALE CONT profit/ loss -8000 fixed cost
Y 114000 114000 -15960 -23960
Z 264000 378000 31680 7720
W 82000 460000 6560 -1160can I do like the above format hence the format in the exam kit answer difficult to understand and if i included just 8000 fixed cos as its dreived from the answer and whyagain it included 2000 avioded fixed cost which one correct start with -10000 or -8000 fixed cost pleas help
I cannot really tell from what you have typed, which part of the answer you are asking about.
It doesn’t matter how you arrange your workings (as long as it is clear for the marker).However when you come to draw the multi-product PV chart then you have to do the products in the order of their CS ratios (highest first).
The point about the avoidable fixed costs is that when you just make Z (the one with the highest CS ratio) the only fixed costs are the general ones plus those of Z.
However when you next start making W, you then have the extra fixed costs specific to W, and so on.
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