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Parents Pricing Home Leaving Cert Business Marketing The following information is supplied by Canon Ltd
The following information is supplied by Canon Ltd - Leaving Cert Business - Question 10 - 2014 Question 10
View full question The following information is supplied by Canon Ltd.
Forecasted Output (Sales) 60,000 units
Fixed Costs €48,000
Selling price per unit €5
Variable Costs per unit €2
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View marking scheme Worked Solution & Example Answer:The following information is supplied by Canon Ltd - Leaving Cert Business - Question 10 - 2014
Total Revenue at forecasted output Only available for registered users.
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To calculate the total revenue, use the formula:
e x t T o t a l R e v e n u e = e x t S a l e s i m e s e x t S e l l i n g P r i c e p e r u n i t ext{Total Revenue} = ext{Sales} imes ext{Selling Price per unit} e x t T o t a lR e v e n u e = e x t S a l es im ese x t S e ll in g P r i ce p er u ni t Substituting the given values:
e x t T o t a l R e v e n u e = 60 , 000 e x t u n i t s i m e s € 5 = € 300 , 000 ext{Total Revenue} = 60,000 ext{ units} imes €5 = €300,000 e x t T o t a lR e v e n u e = 60 , 000 e x t u ni t s im es €5 = €300 , 000
Total Costs of Production at forecasted output Only available for registered users.
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The total costs of production can be calculated with the formula:
e x t T o t a l C o s t s = e x t F i x e d C o s t s + ( e x t V a r i a b l e C o s t s p e r u n i t i m e s e x t S a l e s ) ext{Total Costs} = ext{Fixed Costs} + ( ext{Variable Costs per unit} imes ext{Sales}) e x t T o t a lC os t s = e x t F i x e d C os t s + ( e x t Va r iab l e C os t s p er u ni t im ese x t S a l es ) Plugging in the values:
e x t T o t a l C o s t s = € 48 , 000 + ( € 2 i m e s 60 , 000 ) = € 48 , 000 + € 120 , 000 = € 168 , 000 ext{Total Costs} = €48,000 + (€2 imes 60,000) = €48,000 + €120,000 = €168,000 e x t T o t a lC os t s = €48 , 000 + ( €2 im es 60 , 000 ) = €48 , 000 + €120 , 000 = €168 , 000
Profit at forecasted output Only available for registered users.
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Profit is determined by subtracting total costs from total revenue:
e x t P r o f i t = e x t T o t a l R e v e n u e − e x t T o t a l C o s t s ext{Profit} = ext{Total Revenue} - ext{Total Costs} e x t P ro f i t = e x t T o t a lR e v e n u e − e x t T o t a lC os t s Substituting the calculated values:
e x t P r o f i t = € 300 , 000 − € 168 , 000 = € 132 , 000 ext{Profit} = €300,000 - €168,000 = €132,000 e x t P ro f i t = €300 , 000 − €168 , 000 = €132 , 000
Breakeven point (BEP) in units Only available for registered users.
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The breakeven point can be calculated using the formula:
ext{BEP} = rac{ ext{Fixed Costs}}{ ext{Selling Price per unit} - ext{Variable Costs per unit}}
Substituting the known values:
ext{BEP} = rac{€48,000}{€5 - €2} = rac{€48,000}{€3} = 16,000 ext{ units} Join the Leaving Cert students using SimpleStudy...97% of StudentsReport Improved Results
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