Marc L. answered • 11/18/20

Helping others understand things one step at a time

This question seems overwhelming so lets breakdown but we just need to breakdown how much cost is associated with in-house making of a Calendar:

- you have a 1 time cost of 100,000
- each Calendar needs ink (.30), binding (2.00), 15 pages (15*.10), and labor (1.00) = 4.80 per paper

Now we can solve for the equation of Revenue - Cost = Profit (number of Calendars I will call C)

So lets set the profit using the 3rd party = to the profit of making Calendars in-house:

15C-11C=15C-4.8C-100000, 4C=10.2C-100000, 100000=6.2C, 100000/6.2=C=16129.03 (round up) **16,130 Calendars**

Marc L.

Ahh I see what you're saying, so yes the new cost for ink per calendar should be 15*.3=4.5, 10.2 is profit per paper - cost per calendar (15-4.8 at the time, the cost is different now that there is more ink used) and 6.2 came from 10.2C - 4C11/18/20

Loulou K.

So with new detail, what is the final results please? I am sorry to be a pain11/18/20

Loulou K.

3rd party will sell calendar for 15. Cost 11 and profit is 9. How did you get 10.2 etc please?11/18/20

Marc L.

You're fine, so since my cost was off by 4.2 we can take that off of the 10.2 so we are down to 6C, now we do 6C-4C to get 2C=100000, C=50,000 calendars11/18/20

Loulou K.

6 is profit from 3rd party and 4 profite from in-house right?11/18/20

Loulou K.

Thank you. But I feel a little confused. Total price per calendar in house should be 9. 0.30 ink *15. +0.10*15 for paper. Binding 2 and labor cost is 1.total 9. Also could you please explain how did you get 6.02 and 10.02? thank youuuu11/18/20