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In order for a product to make a profit it must sell enough units to cover what costs?
Wiki User
∙ 14y ago
it has to cover 15,000 unit before it can make a profit
Wiki User
∙ 14y ago
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What is Total Product Cost?
total product that needs to sell to cover total costs
Why do organisations normally charge overheads to products in addition to the direct costs involved in making the products?
To make a profit of course, simple business To cover ALL the costs of making a product. For example - A used car lot does not include the electric bill as a part of costs of goods sold, it is an operating expense (overhead - not specifically tied to any product, but necessary to make all products). However if the used car dealer only made a profit off of each car he sold and did not recoup the electric bills, the electric company would shut off the service and he would be out of business.
Difference between net profit and gross profit?
Gross profit: You want to sell a product at a retail level. You first find a supplier. The item you want to sell for example is a new type of water filter. You want to sell it as a mail order item and only one model is available. The wholesaler puts a suggested retail price on it so that everyone sells it for the same price. The retail price lets say is $249.95 each and your cost is only $49.95 each plus shipping and handling. Shipping and handling is an extra $10.00 each. Your total cost is now $59.95. If you sell them at full retail price your GROSS profit is $190.00 . Net profit: I call this my bottom line (true cost) Now we have to take into account our other costs that are not part of our cost in purchasing the item from our supplier. Some of the other costs may seem small but all have be added up to figure out your net profit. I will try to list most of the costs you may incur. Keep in mind , different business situations may have different costs. For our little filter business our costs will be handling and shipping (this is often charged to recover some or all of costs from the supplier) This is one of your largest costs in mail order. Rent: If you rent space to carry on your business, this can also be a considerable cost. If you hire people to help you and if you want to advertise your product, your cost will grow. These are the larger cost items. There are many small ones that you shoud not loose track of though because they add up. Examples are: your own travel costs. a business phone, printing , packing material, insurance stationery, and the cost to cover any warranty on the product. These costs can be controlled by you to some degree and will improve your "bottom line" So now you have taken all of these costs away from your gross profit. Is there anything left? If there is a balance, now you have your NET PROFIT. Try in invest a large portion of your net profit into more inventory to help your business grow, and remember the cost of that add in the news paper. it costs the same to sell one water filter or one hundred. Keep your costs down and the net profit up.
Disadvantages of break even?
The biggest disadvantage of break even point is that you didn't make any money. You made enough to cover what you paid out, but did not turn a profit.
What is the significance of break even analysis?
Breakeven analysis plays very vital role at start of business or start of planning period as it guides the management that how much units of product must be manufactured and sell to cover full cost before earning any profit or even a predetermined profit as well.
What is Total Product Cost?
total product that needs to sell to cover total costs
If there are no profits in competitive equilibrium why do firms produce how can they stay in business?
why do firm stay in business if profit is=0In economic profit is revenue minus all costs,including implicit costs,like the opportunity cost of the owner's time and money.In the zero profit equilibrium,firms earn enough revenue to cover these costs.by Abdul hanan tareen
A company will always report a profit if?
Any firm will be in profit when it cover all its costs and expenses i.e. when incomes overcome expenses.
What is meant by marketing mix?
The Marketing Mix is composed of four elements:Product - This is where you talk all about the product, the attributes of it, its name, its benefit etc.Price - This is where you talk about pricing strategies. You should consider the cost of producing the product, shipping costs, advertising costs and profit. If your product costs 76 cents to make, and 2 dollars to ship, and you still want to make profit, I would give it a price of something like 8 dollars. This will get you profit, as well as cover advertising costs.Promotion - This is the section that includes all types of promoting for your product. Advertising, PR etc.Place - Where the item will be sold, why only those specific merchants, which section of the store etc.
What is meant by mixing?
The Marketing Mix is composed of four elements:Product - This is where you talk all about the product, the attributes of it, its name, its benefit etc.Price - This is where you talk about pricing strategies. You should consider the cost of producing the product, shipping costs, advertising costs and profit. If your product costs 76 cents to make, and 2 dollars to ship, and you still want to make profit, I would give it a price of something like 8 dollars. This will get you profit, as well as cover advertising costs.Promotion - This is the section that includes all types of promoting for your product. Advertising, PR etc.Place - Where the item will be sold, why only those specific merchants, which section of the store etc.
Why are banks charging a conversion cost to consumers?
To cover the majority of the costs of conversion and to make a small profit.
Total product that needs to sell to cover total costs?
Long run
What is the strategy of Ford motor company?
The stratergies of Ford is to: Cover costs Make Profit Compete with other firms
What is total product that needs to sell to cover total costs?
Break-Even Point
Contribution margin is equal to fixed costs minus variable costs?
No... The contribution margin is the dollar amount of each unit of output that is available first to cover fixed costs and then to contribute to profit.
What is a fee only investment advisor?
Fee only investment advisers are only loyal to you. They have no incentives to sell a product to you for their own financial gain. The only problem is you must invest enough to cover your costs.
What ratio indicated the percentage of each sales dollar that is available to cover fixed costs and to provide profit?
Contribution margin ratio
