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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?
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?
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.