The document discusses break-even analysis for a company that produces three milk products: cream milk, soft milk, and fluff milk. It provides budgeted production, selling price, and variable cost data for each product. The total fixed cost for the year is budgeted at Rs. 1,200,000. To calculate the break-even point, the total sales revenue of Rs. 3,000,000 is apportioned to each product based on its percentage of total sales value and units. This results in break-even sales levels of Rs. 900,000 for cream milk, Rs. 1,500,000 for soft milk, and Rs. 600,000 for fluff milk.

1. Break-even analysis under
Multi-product situation
Eg.
• Kirihetti Pvt Ltd produces three milk based products namely cream milk, soft
milk and fluff milk. Budgeted data for forth coming years would be as follows:
Production and Selling Price Variable cost
Sales (units) per unit (Rs) Per unit (Rs)
Cream milk 200,000 90 50
Soft milk 600,000 50 30
Fluff milk 400,000 30 20
Fixed cost is budgeted at Rs. 1,200,000 for the year.
Calculate the level of sales required for break even.
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2.  If one wishes to find the required sales turnover for
each product, the total sales revenue of Rs.
3,000,000 can simply be apportioned back in the
standard ratio for sales value of each product and as
well as number of units.
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3. Budgeted % Break-even Break-even
Sales Sales Sales (units)
Rs ‘000 re-
apportioned ‘000
Rs ‘000
Cream 18,000 30 900 10
milk
Soft 30,000 50 1,500 30
milk
Fluff 12,000 20 600 20
milk
Total 60,000 100 3,000 60
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4. Break-even Analysis: Fixed costs increases as
the desired output increases
# of MC Annual Fixed C. Output
1 9,600 0-300
2 15,000 300-600
3 20,000 600-900
Variable 10/unit
Cost
Revenue 40/unit
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5. Example Continued
BEP
$
TC
BEP
3
TC
TC
2
TR
1
Quantity