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Chapter 3

The multi-product profit volume graph

In a multi-product environment, two lines are shown on the profit-volume graph:

 One straight line, where a constant mix between the products is assumed

 One bow shaped line, to see how the individual products contribute to profit
rather than as a constant mix. It is assumed that the company sells its most
profitable product first and then its next most profitable product, and so on.

Profit earned

j
n

B

m v
Sales
Breakeven point revenue

k

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