Vijendra Hard Chrome Products manufactures and sells four types of products under brand names of A, B, 1 C and D. The sales mix in the value comprises A, B, C and D, respectively. The total budgeted sales is Rs. 60,000 per month.

The operative costs of the enterprise are as follows:

Product A

60% of the sale price.

Product B

68% of the sale price.

Product C

80% of the sale price.

Product D

40% of the sale price.

Fixed costs

Rs. 14,700 per month.

The firm proposes to change the sales mix for the next month as follows, and it is estimated that the total sales would be maintained at the same level as the current month:

Product A

25%

Product B

40%

Product C

30%

Product D

5%

You are required to calculate:

  1. BEP for all the products on an overall basis for the current month.
  2. BEP for the products on an overall basis for the next month, assuming that the proposal is implemented.
  3. Explain the shift in the BEP to a new position.