Revised selling price per unit  help
jane
Registered Posts: 165 Dedicated contributor 🦉
Oh gosh, i'm being a right numpty today.
14000 tones
If i have a target profit of £260000
Fixed costs of £155000
Target contribution is £105000
The revised contribution per unit i calculated at 105000/14000 = £7.50
How do I work out the revised selling price???? Total mind blank again
Any help or point me in the right direction would be appreciated
Thanks
14000 tones
If i have a target profit of £260000
Fixed costs of £155000
Target contribution is £105000
The revised contribution per unit i calculated at 105000/14000 = £7.50
How do I work out the revised selling price???? Total mind blank again
Any help or point me in the right direction would be appreciated
Thanks
0
Comments

Hello,
Im afraid I don't undertsand the numbers either as the targeted profit is larger than the target contribution which can't be right. Based on those numbers they would have have to sell 20,667 tonnes to breakeven and 55,333 to make the target profit. Eg.
Breakeven point: 155,000 / 7.50 = 20,667
Target Profit:(155,000 + 260,000) / 7.50 = 55,333
Based on the target contribution of £ 105,000 they would currently be making a loss of £ (50,000).
Sorry that probably doen't help much.0 

Sorry, I told you I was being a numpty!!!
I took the total profit of £260000  Fixed costs £155000 = £105000
I should of taken it as 260000 + £155000 = £415000
So revised contribution per unit is 415000/14000 = £29.64
Hope that's right.
Still can't figure out how to calculate the revised selling price, I've spent hours trying to find this in my book.
If i'm still not making sense, I'm gunna shoot myself !! Lol0 
Jane
 You spotted your error, so you aren't a numpty anymore
 Instead of thinking that you must be wrong, how could you work out the price from the information given?
Sandy
sandy@sandyhood.com
www.sandyhood.com0 
Thanks Sandyhood
The variable costs are £80.90
The revised contribution per unit is £29.64
Therefore the new selling price should be £110.54?
As you may have gathered I am not very confident with this unit at all, but i am so determind to get my head around this if its the last thing I do.
Thanks goodness for this forum (home study is not so easy when you have no one to ask)
Many thanks0
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