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    maandpa1227's Avatar
    maandpa1227 Posts: 17, Reputation: 1
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    #1

    Aug 25, 2007, 01:47 PM
    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.
    amandafnnll's Avatar
    amandafnnll Posts: 16, Reputation: 3
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    #2

    Aug 25, 2007, 02:13 PM
    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
    maandpa1227's Avatar
    maandpa1227 Posts: 17, Reputation: 1
    New Member
    		  
    #3

    Aug 25, 2007, 02:38 PM
    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.
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