1. The firm’s management can calculate the total of production to achieve the target profit with the following formula:
Example
Based on the following data, calculate the amount of expenditure required to achieve a profit of RM8,000.
Fixed cost = RM12,000.00
Cost changed per unit = RM6.00
Sales price per unit = RM10.00
Contribution margin per unit = RM4.00 (RM10.00-RM6.00)
