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Suggestions

Forums › ACCA Forums › ACCA PM Performance Management Forums › Suggestions

  • This topic has 1 reply, 2 voices, and was last updated 8 years ago by John Moffat.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • June 4, 2017 at 1:32 pm #390183
    yavela92
    Participant
    • Topics: 3
    • Replies: 2
    • ☆

    Dear John,

    I am very thankful for your lectures, I learnt a lot from your explanations, but when I do Book Revision Kit there are different kind of questions. I want to suggest you alongside with your notes maybe it would be good for us you just to add one more example from Revision Kit. I want to show you one example that looks very simple but it was too hard for me to solve that one.

    E.X.

    A company produces and sells a single product. Budgeted sales are $2.4 million, budgeted fixed costs are $360,000 and the margin of safety is $400,000. What are budgeted variable costs?

    A $1.640 million
    B $1.728 million
    C $1.968 million
    D $2.040 million

    Maybe it sounds very easy but the technic of solving this problem is way too complicated.

    The correct answer is: $1.968 million
    Breakeven sales = $(2.4 million – 400,000) = $2,000,000
    Contribution at this level of sales = $360,000. Therefore contribution/sales ratio = 360,000/2,000,000 = 18%
    Variable costs = 82% of sales. At a sales level of $2.4 million, variable costs = 82% × $2.4 million = $1.968 million

    Please get me right, I am not trying to say that your lectures are useless, just want to understand how more complicated cases are done.

    Best regards

    June 4, 2017 at 4:08 pm #390235
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54674
    • ☆☆☆☆☆

    Firstly, in future if you want me to answer then you must ask in the Ask the Tutor Forum. (This forum is for students to help each other and I do not always look in this forum).

    This question requires no extra knowledge other than what is explained in my lectures. The examiner deliberately sets questions to check that you really understand the topic and that you have not simply learned rules. If you really understand about contribution and about breakeven, then this is not a hard question at all.

    It would be impossible for me to show every possible way in which she can test that you understand. But that is why I have uploaded so many recordings working through past exam questions and explaining how each of them are solved. They are all linked from the ‘revision kit live’ link on the main F5 page.

    If you choose to attend a paid course instead of using our lectures, you will find that it is taught in exactly the same way! 🙂

  • Author
    Posts
Viewing 2 posts - 1 through 2 (of 2 total)
  • The topic ‘Suggestions’ is closed to new replies.

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