MULTIPRODUCT BREAKEVEN CALCULATION
                                                 EXAMPLE QUESTION

There is a store, se...
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Multiproduct Breakeven Calculation Example Question

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Multiproduct Breakeven Calculation Example Question

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  • Dear Khawaja:

    May I use this illustration in my undergraduate class? Please let me know. Thank you.

    Gopala Ganesh
    Professor of Marketing
    University of North Texas USA
    ganesh@unt.edu
       Reply 
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Transcript of "Multiproduct Breakeven Calculation Example Question"

  1. 1. MULTIPRODUCT BREAKEVEN CALCULATION EXAMPLE QUESTION There is a store, selling Sandwiches, Soft Drinks, Baked Potatoes, Tea and Salad Bar. The fixed cost is given to us about the store that is $3,500 per month and $42,000 for year. We have also given the table for variable cost, forcasted sales and price of each product. Item Price Variable Cost Per Unit Forcast Sales Sandwiches $2.95 $1.25 7000 Soft Drink $0.80 $0.30 7000 Baked Potatos $1.55 $0.47 5000 Tea $0.75 $0.25 5000 Salad Bar $2.85 $1.00 3000 Annual Forcasted Item Price (P) Variab Cost (V) V÷P 1-V÷P Sales % Of Sales Weight Sandwiches $2.95 $1.25 0.42 0.58 $20,650 0.446 0.257 Soft Drink $0.80 $0.30 0.38 0.63 $5,600 0.121 0.076 Baked Potatos $1.55 $0.47 0.30 0.70 $7,750 0.167 0.117 Tea $0.75 $0.25 0.33 0.67 $3,750 0.081 0.054 Salad Bar $2.85 $1.00 0.35 0.65 $8,550 0.185 0.120 $46,300 1.000 0.623 Breakeven Calculation For Each Product Item Fixed Cost (F.C) 1-V÷P % Of Sales Breakeven ($) Sandwiches 42000 0.58 0.446 163,412 Soft Drink 42000 0.63 0.121 555,600 Baked Potatos 42000 0.70 0.167 360,111 Tea 42000 0.67 0.081 777,840 Salad Bar 42000 0.65 0.185 350,378 Here is the over all calculation for the breakeven point for all the product. We will use the formula given above on the top of the page. Breakeven Point For All 3500 X 12 = = $67,404 The Products For 1 Year 0.62

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