Break Even Analysis to Multiproduct Case:

Mostly manufacturing firms or service providing organizations have a variety of offerings with different selling prices and variable costs. Break even analysis may be used to determine the proportion of sales of each product. This may be done by giving weight to each products contribution by the proportion of sales. Mathematically,

                       BEP_R = F / ∑ [(1- Vi/ Pi)] × (W_i)

where  V_i = variable cost per unit for ith product,

P_i = price per unit for ith product,

F = fixed cost,

i = each product, and

W_i = weight contribution of ith product.