Question

44.A company's sales for September are Gh500,000 and its variable cost of
sales is Gh200,000. If its break-even sales are Gh300,000 what is the profit
for September?​

Answer 1

Answer:

Profit is Gh120000

Explanation:

Given that sales = Gh500,000, variable cost = Gh200,000, break-even sales = Gh300,000. Let x be the fixed cost.

To find the profit, we have to first find the fixed cost so as to get the total cost. The fixed cost can be gotten using the formula below:

$Break-even\ sales=\frac{fixed\ cost*sales}{sales-variable\ cost}\\\\substituting:\\\\300000= \frac{x*500000}{500000-200000} \\\\300000=\frac{x*500000}{300000} \\\\x=\frac{300000*300000}{500000} =180000$

Therefore fixed cost = Gh180000

Total cost = Fixed cost + Variable cost = Gh180000 + Gh200000 = Gh380000

Profit = Sales - Total cost = Gh500000 - Gh380000

Profit = Gh120000