CVP analysis multiple products

Hi Sir John,

I discovered that we can calcualte the breakeven point in two ways: 1)average contribution to sales ratio or 2) Based on budget sales: computation trough breakeven point in terms of number of mixes, b/even in terms of number of products, b/even in terms of revenue. I must say that the first Average c/S ratio computation seems to me too long!

Question:How is it working at the exam, does examinator let us choose the method?

Next Question on the page 77/BPP Manual – Company PL 5.1 Calculating the ration (see also section 4.1)
My Q: I didn’t understant how they arrived to the mixed ration 7/10and 3/10 in step 6: Calculate breakeven sales:
M=$58,442 *7/10=$40,909.
N=$58,442*3/10=$17533.
Q:Why they didn’t mulptiply only brakeven point with the number of mixes?
Q: Do I need to follow exactly the Steps as per Manual BPP page 77 1 ) Calculate the revenue per mix until Step 6) Calculate Breakeven Sales in the exam?

Next Q: I watched your video about multiple CVP and I think they you were using the other method, based on Budget Sales , more straight forward, so you didn’t use average contribution C/S ratio, did you?

In video you have these following points:
1) Computation of C/S ratio per unit and total C/S ratios.
2) Average C/S ratios – based on budget sales, and total budget contribution
3) Computation of Budget Sales Revenue per product, and total Revenue.
4)Computation C/S ratio.
5) Computation Breakeven and Total revenue=F/C / C/S ratios.
6)P/V chart
7) table
Q: I don’t understand how you were drawing the chart for each product. So, do you start with first point on the chart with F/C?, F/c and 0 [0;F/C]? then you were adding the sales volume according Ranking – first P (12,000*$7)=84,000. And on the Y axis: (12,000*$2.65=$31,800)
Q: So, the co-ordinates of P are [84,000;31,800]?
co-ordinates of C are [24,000;6000]
co-ordinates of V are [28,800;3,600]? And then I put these points on the chart and draw a line between them. Is it correct?

Thank you very much for your answer!