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I understand how to get the BEP for multiple product mix using C/S ratio and without but I do not know how to draw the charts for multiple products, Break Even and Profit Volume charts.
I can perfectly do a single product chart but never came accross a multiple one (till now)So any possible tips explanations, please would be much appreciated.
And thanks in advance.- Topics: 0
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First,calculate the c/s ration of each product individually.Then,u must plot the products on the pv chart from left to right in order of the size of the c/s ratio(starting with highest).to plot it,u need the figures of cummulative sales and cummulative profit.for the cummulative profit use formula *(contribution – fixed cost).
Ok I got some notes of the 2011 BPP book, and here’s what I understood,
For the breakeven chart on the X axis I give the units is in number of mixes for example BEP at 6000 units (which is 6000 mixes of X:Y:Z at 1:2:3 for example)
And the other two ways is isimple cumalative revenue of each by order of again highest C/S ratio
Finally, as a percentage of revenue was I think simple.
Coming to the PV chart it seems that only one way which is plotting each product seperately in order of C/S ratio (highest first) as you mention poo 2503 but what I do not get is how can I find the profitability of each product seperately provided the fixed costs are gicen in total?
To anyone who would like to clarfiy this please affirm if my understanding so far of BEP is correct and the answer for the PV chart profitability.
Thank you poo2 503 and to anyone who helps.- Topics: 0
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see u have to do the cummulative profit.for the first product,u have already deduced all the fixed cost.so for the second product,u gonna have only the second’s product’s contribution will be equal to profit since the fixed cost has already been removed in the firsth product.u dnt need to carry the fixed cost each time u calculating individual profit.i think it might help u.
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I think that the one of the best websites for f5 is:
https://accounting.e-video-lesson.com/
there I found some articles written by Seah. This guy is amazing.
I hope it will help you.
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