Multi-product CVP Analysis - Charts

Multi-product CVP Analysis - Charts

1. PV Charts show:

   • The overall company breakeven point
   • Which products should be expanded in output (the most profitable in terms of C/S ratio)
   • Which products, if any, should be discontinued
   • What effect changes in selling price and sales revenue would have on breakeven point and profit
   • The average profit (the solid line which joins the two ends of the dotted line) earned from the sales of the products in the mix

2. Charts

   • Breakeven Charts
     • Calculate total revenue and total costs for the mix of products and plot on graph. Calculate the BEP using WACS Ratio
   • PV Charts
     • Plot the weighted average line by starting at the Fixed Costs and cross the x axis at the breakeven point and ending at total sales revenue
       • Calculate cumulative revenues and cumulative profit and plot in order of C/S ratio

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