ACCA PM September 2026: The Multi-Product CVP Mistakes the SD25 Examiner Flagged in Kaylene Co
Multi-product CVP is not hard maths. It is three traps the Sept/Dec 2025 PM examiner watched candidates walk into in Kaylene Co: the wrong C/S ratio, ignored rounding instructions, and answering about the company when the question asked about a measure.
What the SD25 examiner said about Kaylene Co
Kaylene Co was the Section C decision-making question in the September/December 2025 PM exam: three washing machine models, a new CEO with a profit target, 20 marks. The examiner's report is unusually specific about where marks went missing.
Part (a) asked for each product's C/S ratio and the overall weighted average C/S ratio, to three decimal places. The examiner's advice: the simplest route is total contribution divided by total revenue, then sanity-check that the answer sits between the highest and lowest individual ratios. If it does not, you have made a computational error. The report also flags that rounding instructions are "essential" to follow — three decimal places means three, not two, not four.
Part (b) asked for the margin of safety percentage and its implications for Kaylene Co. The examiner noted two things. First, an incorrect C/S ratio from (a) still earned full marks in (b) if workings were shown — own-figure rule. Second, generic implications ("a higher MOS is safer") do not score full marks. The requirement says "for Kaylene Co", so the scenario facts must appear in your answer.
Part (c)(ii) was where it fell apart. It asked candidates to explain the effect of increasing the sales volume of the Jumbo model on the weighted average C/S ratio and the CVP analysis already performed. The examiner's words: "The most common mistake was to discuss the effect on Kaylene in general, hence failing to directly address the requirement." A strong answer recognised that Jumbo had the lowest C/S ratio of the three, so more Jumbo drags the overall ratio down, pushes breakeven revenue up and squeezes the margin of safety.
Worked example: the C/S ratio trap
Three products. Product A: revenue $400,000, contribution $200,000. Product B: revenue $300,000, contribution $90,000. Product C (the "Jumbo"): revenue $300,000, contribution $30,000. Fixed costs $256,000.
Wrong answer: individual C/S ratios are 0.500, 0.300 and 0.100. Simple average = 0.300. Breakeven revenue = $256,000 / 0.300 = $853,333. Margin of safety = ($1,000,000 – $853,333) / $1,000,000 = 14.7%.
Correct answer: total contribution $320,000 / total revenue $1,000,000 = 0.320. Check: it sits between 0.100 and 0.500. Breakeven revenue = $256,000 / 0.320 = $800,000. Margin of safety = 20.0%.
The simple average overstated breakeven by $53,333 and understated the safety cushion by a quarter. Every figure downstream — target profit revenue, MOS commentary — inherits the error.
Now the (c)(ii) point. Double Product C's volume: revenue $600,000, contribution $60,000. Totals become $1,300,000 revenue and $350,000 contribution. Weighted C/S ratio falls to 0.269. Breakeven revenue rises to $951,000. That is the answer the examiner wanted: name the measure, state the direction, explain why (C has the lowest ratio). "Kaylene will sell more machines and make more profit" scores nothing against this requirement.
What to do
1. Calculate the weighted C/S ratio in the spreadsheet, not in your head. Use total contribution ÷ total revenue as a formula, then check it lands between the individual ratios. The examiner recommends the spreadsheet functionality for exactly this: workings visible, own-figure marks protected, rounding correct. Set the decimal places to whatever the requirement states before you move on.
2. Split every requirement into its verbs. "Calculate AND explain" is two tasks. In (b), candidates who calculated MOS and stopped left up to half the marks on the table. Write the calculation, then a sentence that starts with a Kaylene fact and ends with what it means.
3. When asked about the effect on a measure, answer about the measure. Read (c)(ii)-style requirements twice and underline the specific outputs named — here, the weighted average C/S ratio and the CVP analysis. Your first sentence should contain those words. Then direction, then reason, then link back to the scenario.
The numbers
PM passed 41% in June 2026, 45% in March 2026 and 40% in December 2025 — consistently the hardest Applied Skills paper. Kaylene Co was a 20-mark question with roughly 12 marks of pure technique: right formula, right rounding, right subject in the sentence.
The maths in multi-product CVP takes two minutes. Reading the requirement properly takes thirty seconds. Skip the thirty seconds and the two minutes were wasted.