Skip to content

FIA Forums

Kit Question

MM075y ago
Sales units 128,000 Sales revenue $640,000 Variable costs $384,000 Fixed costs $210,000 What sales revenue is required to earn a profit of $65,000? $458,333 $590,000 $687,500 $705,000 Sir this question is not much difficult. I want to ask one thing. Like as we have calculated here sales by first calculating required contribution and then dividing by C/S will give us answer C. But why we are unable to calculate by adding all the cost and profit to find sales revenue. Like V.C+F.C+Profit will give us total revenue (Sales Revenue - V.C - F.C = Profit so Sales= V.c+f.c+profit) so 384000+210000+65000=659000. Why these two are not equal?
MM075y ago#1
Thank you sir. I came to know the reason. I was not amending the variable cost as per changing units. I am unable to delete the question so sorry.
Sign into reply to this topic.