The Student Room Group

Maths question

A company sells skateboards for £100 each. They cost £35 in materials and the labour costs are £10 each. Rent, advertising, managers salary and other costs are £450,000 per year. If the company manages to sell 10,000 skateboards per year, what would be the profit for the year? Extra task for the keen: how many skateboards would they have to sell to break even (cover all costs with sales)

(sales costs = profit)
Let's break this down from top line to bottom, as you would with a P/L Statement:

Revenue: 10,000 x 100 = £1,000,000
Cost of Goods Sold: £450.000

Gross Profit: £550,000

Operating Expense: £450,000

Net Profit: £100,000

To break even, they'd need to sell 8,181.

If you need an explanation for the above let me know.
(edited 1 year ago)

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