In its first year, “Abol Buna Co” had the following experience Sales = 25,000 units Selling price = br. 100 TVC = br. 1,500,000 TFC = br. 350,000 Required: 1. Develop Revenue, cost &
Nice job, cutting off your post mid-sentence ...
As is always the case,
cost = TFC + TVC
revenue = price * quantity
profit = revenue - cost
To develop the revenue, cost, and profit for "Abol Buna Co" based on the given information, we need to calculate the following:
1. Revenue: Revenue is calculated by multiplying the number of units sold by the selling price per unit.
Revenue = Sales * Selling Price
Sales = 25,000 units
Selling Price = br. 100
Revenue = 25,000 * 100 = br. 2,500,000
Therefore, the revenue for the first year is br. 2,500,000.
2. Total Variable Cost (TVC): Total Variable Cost refers to the cost that changes with the level of production. It includes direct material costs, direct labor costs, etc.
TVC = br. 1,500,000
The TVC for the first year is br. 1,500,000.
3. Total Fixed Cost (TFC): Total Fixed Cost refers to the cost that remains constant regardless of the level of production. It includes costs like rent, salaries, etc.
TFC = br. 350,000
The TFC for the first year is br. 350,000.
Now, let's calculate the cost and profit:
a. Total Cost (TC): Total Cost is the sum of Total Variable Cost (TVC) and Total Fixed Cost (TFC).
TC = TVC + TFC
TC = 1,500,000 + 350,000 = br. 1,850,000
The Total Cost for the first year is br. 1,850,000.
b. Profit: Profit is calculated by subtracting Total Cost (TC) from Revenue.
Profit = Revenue - Total Cost
Profit = 2,500,000 - 1,850,000 = br. 650,000
The Profit for the first year is br. 650,000.