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Marginal costing

Why do we takes weights in computing multi product break even analysis? In the given example actually 4 units of J contributes rs. 40 and 3 units of K contributes r.s 20 So can't multiple it directly like 4 *40 (J) 3*20(K) ? Why can't we do like that?

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Swathi Krishna

Swathi Krishna

CA Inter

7K+

02-Oct-20

35

Answers (3)

Becasue 4 & 3 are not the no. of units of sales, its the sales ratio.


sudha reddy

sudha reddy

Moderator

03-Oct-20

You can do that. When you compute breakeven, it would be 1 set of 4J and 3K. Breakeven would be in sets. You can later convert it into units.


Suraj Lakhotia

Suraj Lakhotia

Admin

03-Oct-20

K


Thread Starter

Swathi Krishna

Swathi Krishna

CA Inter

7K+

04-Oct-20

All the Best
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