Profit Essay

595 WordsFeb 11, 20133 Pages
1 Profit Brian Howard BUS630 Monique Smalling August 13, 2012 2 Profit = Unit CM × Q − Fixed expenses $0= ($30 − $18) × Q − $150,000 $0= ($12) × Q − $150,000 $12Q= $150,000 Q= $150,000 ÷ $12 Q= 12,500 pairs 12,500 pairs × $30 per pair = $375,000 in sales 2. The simplest approach is: Break-even sales.........................................12,500 pairs Actual sales.................................................12,000 pairs Sales short of break-even........................... 500 pairs 500 pairs × $12 contribution margin per pair = $6,000 loss Alternative solution: Sales (12,000 pairs × $30.00 per pair)..........................$360,000Variable expenses (12,000 pairs × $18.00 per pair)............................... 216,000Contribution margin.....................................................144,000Fixed expenses............................................................. 150,000 Net operating loss......................................................... ($ 6,000) Unit Sales to Fixed Expenses = _______________ Break Even Unit Contribution Margin Dollar Sales to Fixed Expenses

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