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CIMA P1 · Operational Level

C. Short-term commercial decision making

Master marginal costing, relevant cost analysis, and short-term decision-making frameworks to solve pricing, make-or-buy, and resource optimisation problems. This section equips you with practical tools to evaluate commercial decisions under constraints using breakeven analysis and linear programming techniques.

  • 23 lessons
  • 3 modules
  • 3.5h of video
  • ~30% of the exam
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What you'll learn

By the end of C. Short-term commercial decision making.

  • Identify and classify relevant costs and non-relevant costs in short-term decision-making scenarios
  • Apply marginal costing principles to calculate breakeven points for single and multi-product environments
  • Analyse pricing strategies and make-or-buy decisions using relevant cost analysis
  • Evaluate resource allocation problems using single limiting factor and shadow price techniques
  • Apply graphical linear programming methods to optimise decisions under multiple constraints
  • Explain how to use decision-making frameworks to support effective short-term commercial recommendations

The lessons

23 lessons, module by module.

Short-term decision making (*with 2026 updates)

8 lessons
  1. 1 Relevant costs 10m
  2. 2 Non-relevant costs 4m
  3. 3 Cost treatments - part 1 15m
  4. 4 Cost treatments - part 2 13m
  5. 5 Relevant costing and accounting concepts 7m
  6. 6 Decision making using relevant cost principles 14m
  7. 7 Non-financial factors 11m
  8. 8 Weighted benefit scoring (2026 syllabus) 12m

Models for decision making

7 lessons
  1. 1 Single product breakeven - part 1 11m
  2. 2 Single product breakeven - part 2 5m
  3. 3 Multi product breakeven analysis - part 1 9m
  4. 4 Multi product breakeven analysis - part 2 13m
  5. 5 Limitations of breakeven analysis 3m
  6. 6 Data visualisation 4m
  7. 7 Decision making models 11m

Limiting factor analysis

8 lessons
  1. 1 Single limiting factors 14m
  2. 2 Shadow price 3m
  3. 3 Graphical linear programming - part 1 10m
  4. 4 Graphical linear programming - part 2 6m
  5. 5 Simultaneous equations - part 1 3m
  6. 6 Simultaneous equations - part 2 11m
  7. 7 Simultaneous equations - part 3 8m
  8. 8 Assumptions and limitations of linear programming 12m

Questions

About C. Short-term commercial decision making.

What does the Short-term Commercial Decision Making section cover?

This section covers the application of marginal costing and relevant cost analysis to evaluate short-term business decisions. You will learn to identify relevant costs, calculate breakeven points for single and multi-product scenarios, and optimise decision-making under resource constraints using techniques such as limiting factor analysis and linear programming. These frameworks are essential for pricing decisions, make-or-buy evaluations, and resource allocation.

Is this section important for the P1 exam?

Yes, Short-term Commercial Decision Making is a core section of the P1 Operational Level syllabus and accounts for a significant proportion of exam questions. The concepts of relevant costing, breakeven analysis, and linear programming are frequently tested in objective test scenarios requiring practical application to realistic business problems.

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