Calculate the profit with different volume and price levels?

2017-02-10 7:37 pm
Option 1
Sales price- £70
Demand- 10000 units
Variable material costs- £20
Variable labour costs- £10
Fixed overheads per unit- £24
Total cost- £54

Option 2
Sales price- £90
Demand- 6000 units
Variable material cost- £20
Variable labour cost- £10
Fixed overheads per unit- £40
Total cost- £70

1. Calculate the profit if the price is set at £70 and the demand is 10,000 units but the factory can only produce 8000 units.

Please explain and show working, thanks.

回答 (1)

2017-02-10 8:49 pm
Margin is 70-20-10 = 40 per unit
Fixed overheads = 240000 (10000 x 24)

Profit = 8000 x 40 - 240000 = 80000


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