Integrated Process for Multiple Product Breakeven Analysis and Limiting Resource Allocation in Profit Planning
Breakeven analysis for multiple products can help managers understand how each product or service contributes to a company's overall profitability and performance. It can help identify the most and least profitable products or services and how to optimize the company's sales mix and pricin...
Saved in:
| Main Author: | |
|---|---|
| Format: | Article |
| Language: | deu |
| Published: |
Institute of Accounting and Finance
2024-12-01
|
| Series: | Облік і фінанси |
| Subjects: | |
| Online Access: | http://www.afj.org.ua/pdf/1103-integrovaniy-analiz-bezzbitkovosti-kilkoh-produktiv-ta-obmezhenogo-rozpodilu-resursiv-u-planuvanni-pributku.pdf |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| _version_ | 1841556061702586368 |
|---|---|
| author | Collins C Ngwakwe |
| author_facet | Collins C Ngwakwe |
| author_sort | Collins C Ngwakwe |
| collection | DOAJ |
| description | Breakeven analysis for multiple products can help managers understand how each product or service contributes to a company's overall profitability and performance. It can help identify the most and least profitable products or services and how to optimize the company's sales mix and pricing strategy. This paper presents a step-by-step process of an integrated multiple product analysis for the derivation of multiple product breakeven point coupled with the process of allocation of limiting factor in multiple product cases. Accordingly, the author used a hypothetical case of the Integrated Juicy Products PTY to demonstrate an integrated process of conducting multiple product breakeven analysis, derivation of multiple breakeven point and separate breakeven point of each product among the multiple products. Additionally, the research presents insight into the procedural allocation of a limiting factor of production to optimize product mix and profit contribution. In this study, the procedural analysis demonstrates the optimum usage of the limiting factor and the attendant optimum production in the multiple mix of products, culminating in the optimum contribution margin. To buttress the optimization implication of limiting factor allocation, it concludes by presenting a comparison of total contribution using equal allocation of limiting factor to accentuate the fact that in times of limiting factor, the optimum contribution is attainable with optimal allocation of limiting factor of production through the prioritizing of the products with higher contribution per unit of limiting factor. The paper offers insights for practical application in multiple product companies and case teaching and research in business schools. |
| format | Article |
| id | doaj-art-f7c42d69c5d549c3be0d609ef412211c |
| institution | Kabale University |
| issn | 2307-9878 2518-1181 |
| language | deu |
| publishDate | 2024-12-01 |
| publisher | Institute of Accounting and Finance |
| record_format | Article |
| series | Облік і фінанси |
| spelling | doaj-art-f7c42d69c5d549c3be0d609ef412211c2025-01-07T14:33:52ZdeuInstitute of Accounting and FinanceОблік і фінанси2307-98782518-11812024-12-014(106)445010.33146/2307-9878-2024-4(106)-44-50Integrated Process for Multiple Product Breakeven Analysis and Limiting Resource Allocation in Profit PlanningCollins C Ngwakwe0https://orcid.org/0000-0002-6954-8897University of Limpopo, Polokwane, South AfricaBreakeven analysis for multiple products can help managers understand how each product or service contributes to a company's overall profitability and performance. It can help identify the most and least profitable products or services and how to optimize the company's sales mix and pricing strategy. This paper presents a step-by-step process of an integrated multiple product analysis for the derivation of multiple product breakeven point coupled with the process of allocation of limiting factor in multiple product cases. Accordingly, the author used a hypothetical case of the Integrated Juicy Products PTY to demonstrate an integrated process of conducting multiple product breakeven analysis, derivation of multiple breakeven point and separate breakeven point of each product among the multiple products. Additionally, the research presents insight into the procedural allocation of a limiting factor of production to optimize product mix and profit contribution. In this study, the procedural analysis demonstrates the optimum usage of the limiting factor and the attendant optimum production in the multiple mix of products, culminating in the optimum contribution margin. To buttress the optimization implication of limiting factor allocation, it concludes by presenting a comparison of total contribution using equal allocation of limiting factor to accentuate the fact that in times of limiting factor, the optimum contribution is attainable with optimal allocation of limiting factor of production through the prioritizing of the products with higher contribution per unit of limiting factor. The paper offers insights for practical application in multiple product companies and case teaching and research in business schools. http://www.afj.org.ua/pdf/1103-integrovaniy-analiz-bezzbitkovosti-kilkoh-produktiv-ta-obmezhenogo-rozpodilu-resursiv-u-planuvanni-pributku.pdfbreakeven analysisprofit planningmultiple products companyoptimum productionintegrated processlimiting factor allocationmargin of safetycontribution margin |
| spellingShingle | Collins C Ngwakwe Integrated Process for Multiple Product Breakeven Analysis and Limiting Resource Allocation in Profit Planning Облік і фінанси breakeven analysis profit planning multiple products company optimum production integrated process limiting factor allocation margin of safety contribution margin |
| title | Integrated Process for Multiple Product Breakeven Analysis and Limiting Resource Allocation in Profit Planning |
| title_full | Integrated Process for Multiple Product Breakeven Analysis and Limiting Resource Allocation in Profit Planning |
| title_fullStr | Integrated Process for Multiple Product Breakeven Analysis and Limiting Resource Allocation in Profit Planning |
| title_full_unstemmed | Integrated Process for Multiple Product Breakeven Analysis and Limiting Resource Allocation in Profit Planning |
| title_short | Integrated Process for Multiple Product Breakeven Analysis and Limiting Resource Allocation in Profit Planning |
| title_sort | integrated process for multiple product breakeven analysis and limiting resource allocation in profit planning |
| topic | breakeven analysis profit planning multiple products company optimum production integrated process limiting factor allocation margin of safety contribution margin |
| url | http://www.afj.org.ua/pdf/1103-integrovaniy-analiz-bezzbitkovosti-kilkoh-produktiv-ta-obmezhenogo-rozpodilu-resursiv-u-planuvanni-pributku.pdf |
| work_keys_str_mv | AT collinscngwakwe integratedprocessformultipleproductbreakevenanalysisandlimitingresourceallocationinprofitplanning |