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Why in calculation when we need to find additional profit earned from hiring new oven, from selling price we subtract only material cost (2,0$-0,25$) and not other costs as well 2,0$-(0,25$+0,5$+0,3$)?
As I understood, we subtract only material cost when find throughput, and not net profit.
Kindly asking you to advice for the above mentioned case.
This is throughput
I have explained this previously only material costs are considered variable …………
So selling price of $2 – 0.25 mats onlyCan I ask you to watch the video again please
Currently Baking has 1,440 minutes available.
This is for 3 ovens, and so 1 more oven will give them 1,440/3 = 480 more minutes.
Therefore they can produce 480/120 = 4 more batches of C, which is 4 x 20 units.
Therefore they will make 80 x (2 – 0.25) = $140 more profit.
The oven costs $45, so the net increase = 150 – 45 = $95.
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