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break even question
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11-22-2008, 04:04 AM
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Saispapedlimi
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Oct 2005
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If all tyres had been sold for €150 (net), the tyre manufacturer would have gotten €4,029,600,000. That's a given. Also given is they don't get that, they got €3,729,600,000.
The difference between the two numbers is what they've given to Sears. The difference between the two numbers is Sears' margin. The total dealer margin is thus €300,000,000.
Amount of tyres sold * price per tyre = x = €4,029,600,000
Amount of tyres sold * price per tyre - dealer margin = x - y = €4,029,600,000 - €300,000,000
€300,000,000 is 40% of the money made on tyres sold through Sears.
€300,000,000 / 40 * 100 is the total amount of money made on tyres sold through Sears:
€750,000,000
To gross €750,000,000, you have to sell 5,000,000 tyres (5 million * 150 = 750 million).
Five million tyres were sold through Sears to hit the same net result as in the previous year.
Check:
21,864,000 * €150 + 5,000,000 * €90 = €3,279,600,000 + €450,000,000 = €3,729,600,000 [thumbup]
(€90 is what the manufacturer makes on tyres sold through Sears: €150 - 40%)
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