profit/costs

valentino46

hi all,

im sure that variable costs have something to do with contribution but cant seem to work out the following:

sales revenue A: 30000

costs:
labour 4200
veh depreciation 3400
other fixed 2200


sales revenue B: 37500

costs:
labour 5250
veh depreciation 4450
other fixed 2200

sales revenue C: 45000

costs:
labour 6300
veh depreciation 5500
other fixed 2200

i think ive got to deduct the variable costs from the sales revenue figure to get the profit for manufacture, and ignore the fixed costs but am unsure, really pulling my hair out with this one hope someone can help.

cheers

rob

Jo Clark

Hello Rob

I'm not sure I understand exactely what you are trying to calculate. What is the actual question you are trying to answer?


Price - Variable Costs Per Unit = Contribution Margin Per Unit

Contribution Margin Per Unit x Units Sold = Product’s Contribution to Profit

Contributions to Profit From All Products – Firm’s Fixed Costs = Total Firm Profit


Do you have any further information provided in the question?


Kind regards.


JC