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  • 1.  CMA part 2 - cvp

    Posted 10-19-2020 06:14 AM

    why did she use Weighted average selling price in her calculation.?

    Fact Pattern:  Catfur Company has fixed costs of $300,000. It produces two products, X and Y. Product X has a variable cost percentage equal to 60% of its $10 per unit selling price. Product Y has a variable cost percentage equal to 70% of its $30 selling price. For the past several years, unit sales of Product X were 40% of total unit sales. That ratio is not expected to change.
     
    Question: 25 Assume that Catfur Company achieved its planned breakeven level of sales in dollars, but the mix of products sold was one-to-one. All actual costs and unit selling prices equaled budgeted amounts. What is the impact on profitability?
    Answer (A) is correct.
    The expected sales mix is 40% for Product X and 60% for Product Y. Weighted-average UCM equals $7 {[$10 – ($10 × 60%)] × 40%} + {[$30 – ($30 × 70%)] × 60%}. Weighted-average selling price equals $22 [($10 × 40%) + ($30 × 60%)]. The weighted-average CMR therefore equals 0.3181818 ($7 ÷ $22), and the breakeven point in sales dollars equals $942,857 ($300,000 ÷ 0.3181818). If actual sales were 50% Product X and 50% Product Y, weighted-average UCM would equal $6.50 {[$10 – ($10 × 60%)] × 50%} + {[$30 – ($30 × 70%)] × 50%}. Weighted-average selling price would equal $20 [($10 × 50%) + ($30 × 50%)]. The weighted-average CMR would therefore equal 0.325 ($6.50 ÷ $20), and the breakeven point in sales dollars would equal $923,077 ($300,000 ÷ 0.325). Given that sales reached the budgeted breakeven point of $942,857, Catfur must have made a profit of $19,780 ($942,857 – $923,077).


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    Tayba Al-Mehdar
    Analyst
    Khobar
    Saudi Arabia
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  • 2.  RE: CMA part 2 - cvp

    Posted 10-20-2020 07:50 AM
    Hi Tabya,

    For multiple products, the weighted average Selling price would be used.

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    Sanjana
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  • 3.  RE: CMA part 2 - cvp

    Posted 09-05-2023 03:02 PM

    Question: 19 A company sells two products with the following results for the year just ended.
    Product 1 Product 2
    Sales $12,000,000 $3,000,000
    Variable costs 4,800,000 1,500,000
    Fixed costs 5,400,000 400,000
    Assuming the product mix and the sales mix remain the same, the company's 
    breakeven point in sales dollars is
    A. $12,100,000
    B. $13,810,000
    C. $10,000,000
    D. $9,800,00



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    Govind Jha
    Accountant
    Ulhasnagar 3 MH
    India
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  • 4.  RE: CMA part 2 - cvp

    Posted 10-27-2023 06:09 AM

    Dear Hi freinds, 

    Can anyone share Cma Part 2 materials/test bank.. Im doing self study. Will be highly appreciated if you can help.

    My email I'd : shanikaruvan@...

    Thanks in advance. 

    Shani. 



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    SHANI
    Assistant Manager Accounts
    KUWAIT CITY
    Kuwait
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