SBU #1 JANUARY CLIENTS 20 AVE PRICE $10,000 REVENUE $200,000 FIXED COST VARIABLE

Question

SBU #1 JANUARY
CLIENTS 20
AVE PRICE $10,000
REVENUE $200,000
FIXED COST
VARIABLE COST
PROFIT/LOSS

Let's say I had a business. For the month of January I had 20 clients. I charged each client $10,000. So for the revenue I received $200,000. Let's say that it cost me a fix cost of $2000 per client. How would I figure out the fixed cost and variable cost and then calculate my profit or loss for the month of January.

(this is a fictitious company, if you think I should have a variable cost or different fixed cost please let me know). Please give me step-by-step if possible instructions

Explanation / Answer

There's definitely a typo in your question, but to help you out some... 1) Your Total Fixed Costs will be the same no matter the number of units (hence, fixed). So in your example TFC is ALWAYS 56,000 2) Your Total Variable Costs = Unit Variable Cost * # of Units Plug in your given info: 28,000 = Per Unit Cost * 700 This gives you a per unit cost of 40 So this way, you know that Total Cost = 56,000 * 40X, where X = Number of Units. For example, if you only made 600 units: Total Cost = 56,000 * 40(600) TC = 80,000 TFC = 56,000 TVC = 24,000

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