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Remedial Question

  • 02-03-2011 2:47pm
    #1
    Pandoras Twist
    Registered Users, Registered Users 2 Posts: 1,375 ✭✭✭


    Hi All,

    Sorry about asking such a silly question but I cant find the answer on the internet or in my books.

    I want to calculate a target volume + a % of sales. Its the % of sales bit that's confusing me

    Sales Price: 5
    Variable costs: 3
    Contribution 2
    Fixed costs:18,000

    Find the number of units required to make a profit of 10% on sales.

    So the BEP is 18,000/2 = 9,000 units but how do I get a % of sales?


    The possible answers are:

    a) 11,000
    b) 11,500
    c) 12,000
    d) 12,500

    Thanks!


Comments

  • #2
    ants09
    Registered Users, Registered Users 2 Posts: 716 ✭✭✭ants09


    5x-3x-18000=10%5x
    2x-18000=0.5x
    2x-0.5x=18000
    1.5x=18000
    x=12000 units


  • #3
    Pandoras Twist
    Registered Users, Registered Users 2 Posts: 1,375 ✭✭✭Pandoras Twist


    Thanks a million. All makes perfect sense when I see it there. I was too focused on trying to use the exact formula.

    Going to go hang my head in shame now.

    Cheers!


  • #4
    ants09
    Registered Users, Registered Users 2 Posts: 716 ✭✭✭ants09


    your welcome and to be honest dont knock yourself as being there and done that so nothing to be ashamed off


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