P1 overview - short-term commercial decision making
Master the principles of short-term commercial decision-making by understanding which costs and revenues truly matter in business choices. This lesson equips you with analytical tools including breakeven and cost-volume-profit (CVP) analysis, linear programming techniques, and shadow pricing methods to optimise production decisions, manage limiting factors, and maximise profitability across single and multi-product scenarios.
This lesson is part of a paid course
Buy the course to unlock every video lesson and the AI Tutor, plus mock exams with feedback on CIMA courses.
Already bought? Sign in
Ask the AI tutor anything about this lesson
It knows every lesson in the course — explanations, clarifications, practice questions.
In this lesson
- 0:00 Introduction to Commercial Decision Making
- 0:14 Relevant Costs and Revenues Explained
- 1:51 Non-Relevant Costs and Revenues
- 3:31 Breakeven Analysis Overview
- 4:15 Break Even and CVP Formulas
- 6:08 Multi-Product Breakeven Analysis
- 8:08 Addressing Limiting Factors
- 10:33 Linear Programming for Optimal Production
- 12:30 Understanding Shadow Pricing
About this lesson
Dive into the intricacies of short-term commercial decision-making with a focus on relevant costs, revenues, and breakeven analysis. This video covers the future-oriented nature of relevant costs, the importance of opportunity and avoidable costs, and how non-relevant costs like sunk and fixed costs influence decisions. Learn to apply breakeven and CVP analysis for single and multi-product scenarios, tackle limiting factors using linear programming, and understand the concept and calculation of shadow pricing. Perfect for business professionals seeking to refine their financial decision-making skills, this tutorial offers valuable insights into optimising profit and strategic planning.
Duration: 14m
- Relevant costs and revenues
- Opportunity costs and avoidable costs
- Breakeven analysis and CVP analysis
- Multi-product breakeven decisions
- Limiting factors and linear programming
- Shadow pricing
Transcript
Every lesson comes with a full searchable transcript - included with the course.
Get the P1 Objective Test course
All 104 video lessons, timed mock exams marked instantly with an explanation for every question, an AI Tutor in every lesson and lifetime access.
Already bought? Sign in