contrebution profit worksheet by presentinggamekind

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									                                                                          Group 6


                                                                         Key terms



What is meant by the term ‘contribution per unit’? (give the calculation)

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What is meant by the term ‘total contribution’? (give its calculation)

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What is the calculation of ‘profit’ using fixed & variable costs & revenue?

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What is the calculation of ‘profit’ using margin of safety & contribution per unit?

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What is the calculation of ‘profit’ using total contribution & fixed costs?

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                                                Group 6


Calculations:

    1. If a business sells its product for £36 and variable costs include: buying stocks £6, labour per
       product £8 & packaging £2, calculate the contribution per unit




    2. If the business has fixed costs of £60,000 per year calculate, its profit if the business sells
       2,000 products




    3. Same question if the business sells 5,000 products




    4. If a business sells its product for £65 and it costs the business £25 to manufacture the
       product. Calculate the total contribution if the business sells 12,000 units.




    5. Calculate the profit made by a business with a margin of safety of 300,000 units and a
       contribution per product of £40.




    6. What is the profit made by a business with a total contribution worth £1.2 million, total
       costs of £450,000 and variable costs of £250,000?

								
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