for a project...?

Question

i have to do a budget for a suntan lotion company that is going to be in trinidad....

how should i do this budget...

my instructor wants me to seperate variable and fixed cost...after this i need to find the revenue and how much i need to sell to equal the amount i spent(something like that). but i forgot the equation. plz help..thanx.

Answer 1

Fixed cost (F) plus the product of the variable costs (V) and units sold (U) equals total cost (C).

F + V*U = C

Revenue (R) = U times price per sale (S).

R = U*S.

If you are looking for the break even point. Then R = C. So

F + V*U = U*S.

If you know the values for F, V and S, then plug them into the equation and solve for U.