Reading comprehension is a skill that empowers lifelong learning intelligence for a better self.
To determine how many sales (in dollars) are required..
✅ ..to achieve a target profit, you need to consider the following factors:
✅ Fixed Costs
🚩 These are costs that don’t change with the level of production and sales. Examples include rent, salaries, and insurance.
✅ Variable Costs
🚩 These are costs that change with the level of production and sales. Examples include raw materials, labour, and shipping.
✅ Sales Revenue
🚩 This is the total amount of revenue generated from sales.
🚩 This is the amount of money left over after all costs have been deducted from sales revenue.
✅ ..you can use the following formula:
✅ ..let’s say your total fixed costs are $10,000, your variable costs are 40% of sales revenue, and your target profit is $5,000, you would calculate your required sales revenue as follows: