Determine what your total profit would be if you sell all of the products/provide all services you can while charging the price above
To determine the total profit from selling all products or providing all services at a price above cost, you would need to calculate the profit per unit and then multiply it by the total number of units sold.
Here is a step-by-step guide to calculating the total profit:
1. Determine the cost per unit: Calculate the cost of producing or providing each unit of product or service.
2. Decide on the selling price: Set a price above the cost per unit. This price should consider market demand, competition, and other factors.
3. Calculate the profit per unit: Subtract the cost per unit from the selling price. This gives you the profit earned per unit.
4. Determine the total number of units sold: This depends on the demand and the capacity to produce or provide the product or service. Suppose you have the number of units sold (let's call it "N").
5. Calculate the total profit: Multiply the profit per unit (from step 3) by the total number of units sold (from step 4).
Total Profit = Profit per Unit × Total Number of Units Sold
For example, let's assume the cost per unit is $10, the selling price is $20, and 100 units are sold:
1. Cost per Unit = $10
2. Selling Price = $20
3. Profit per Unit = Selling Price - Cost per Unit = $20 - $10 = $10
4. Total Number of Units Sold = 100
5. Total Profit = Profit per Unit × Total Number of Units Sold = $10 × 100 = $1000
Therefore, in this example, if you sell all 100 units at a price above cost, the total profit would amount to $1000.