Profit volume

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Darrell
Darrell Registered Posts: 2 New contributor 🐸
in AAT Level 3 (Level 6 in Scotland)
Anybody out there any idea how you work out the total fixed costs when you only have the profit volume ratio, the unit selling price and the break even revenue for the year?

I need this urgently please if anybody can help

Thanks

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  • King of the Mountains
    King of the Mountains Registered Posts: 66 Regular contributor ⭐
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    I think break even revenue is the fixed cost.:001_unsure:
  • MTX
    MTX Registered Posts: 1 New contributor 🐸
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    King of the Mountains wrote: »
    I think break even revenue is the fixed cost.:001_unsure:
    This is incorrect. The equation is:

    Break Even Revenue = Fixed Costs / Profit Volume Ratio

    Therefore, Fixed Costs = Break Even Revenue / Profit Volume Ratio
  • SandyHood
    SandyHood Registered, Moderator Posts: 2,034 mod
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    Fixed costs = Break even revenue x PV ratio
    Sandy
    sandy@sandyhood.com
    www.sandyhood.com

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