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C-V-P analysis

Compute the amount of profit

I need help with my figures on this problem this is what I did.

The company sells lawnmowers for $895 each. The variable cost per lawnmower is $540. The company's monthly fixed costs are $84,500. Using the C-V-P equation, compute the amount of profit the company will have for a month in which the company sells 375 lawnmowers.

(sales price x units) - (variable cost x units) - fixed costs = profits

895 x 375 = 3356
540 x 375 = 2025

3355 - 2025 = 1330
1330 - 84,500 = 83,170

Profit = 83,170

I am trying to follow the forumla but I don't know if this is right. Please advise.

Quote:

Originally Posted by maandpa1227

Compute the amount of profit

I need help with my figures on this problem this is what I did.

The company sells lawnmowers for $895 each. The variable cost per lawnmower is $540. The company's monthly fixed costs are $84,500. Using the C-V-P equation, compute the amount of profit the company will have for a month in which the company sells 375 lawnmowers.

(sales price x units) - (variable cost x units) - fixed costs = profits

895 x 375 = 3356
540 x 375 = 2025

3355 - 2025 = 1330
1330 - 84,500 = 83,170

Profit = 83,170

I am trying to follow the forumla but I don't know if this is right. Please advise.

I keep coming up with 48,625.
see:
895 x 375 = 335,625
540 x 375 = 202,500
335,625 - 202,500 = 133,125
133,125 - 84,500 = 48,625

Quote:

Originally Posted by amandafnnll

i keep coming up with 48,625.
see:
895 x 375 = 335,625
540 x 375 = 202,500
335,625 - 202,500 = 133,125
133,125 - 84,500 = 48,625

Oh my, my

I tried this way too and I did not think it was right so I did it another way. I guess I should not second guess myself which is probably where I became confused.

Thank you.