03-31-2011, 10:24 PM
Ok assuming the variable cost increases at the same rate as revenue i.e. The variable cost per unit remains same than
45000/75000 = 0.6
This means that for each 1 pound sales we incur 0.6 variable cost. Therefore for 105000 sales we will incur 63000 variable cost. This means an excess of 18000 will be incurred for excess sales of 40000 ( 63000-45000 ).
45000/75000 = 0.6
This means that for each 1 pound sales we incur 0.6 variable cost. Therefore for 105000 sales we will incur 63000 variable cost. This means an excess of 18000 will be incurred for excess sales of 40000 ( 63000-45000 ).
