Page 17 - CIMA OCS Workbook May 2019 - Day 1 Tasks

MANAGEMENT ACCOUNTING (P1) ‐ FAMILIARISATION

3 DECISION MAKING

Note: You are unlikely to be asked to do calculations in the exam. However, the following
questions will help with familiarisation of the budgetary information.

EXERCISE 3(A) – CVP ANALYSIS

Question Your response

Discuss which costs are fixed
and which variable.

Determine the breakeven
revenue in 2019 and the
safety margin.

(Note: assume that direct
labour is a fixed cost and that
total budgeted direct labour
for 2019 is E$5,829k and total
fixed production OH
E$3,489k.)

Determine which products Product Price Contribution C/S ratio
have the highest C/S ratios Tablets ‐ vitamins 800 395
and comment on your Tablets ‐ minerals 700 335
answer. Tablets ‐ herbal 900 465
Tablets ‐ care 1,000 535
Liquids ‐ vitamins 1,100 622
Creams ‐ vitamins 2,200 928
Creams ‐ care 3,200 1,328

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