Hi Anonymous,

the following are the inputs of the problem:

• Price: 1.6x import goods
• Renting: 1350/ month
• Staff: 1120/ month
• Operation: 825/ month
• Import goods Feb: 39840
• Import goods Jan: 15300
• All goods sold out in Feb

Assuming stock becomes costs when sold, profits can be calculated as follows:

Revenues – Import goods – Renting – Staff – Operation

<->55140*1,6-55140-1350-1120-825

<->88224-58435

<->29789

Best,

Francesco

(edited)

I have a hunch you forgot to subtract the $15,300 worth of stock from January.

You need to subtract the January stock cost, because you sold it in Feb. For profit-taking purposes, you have to cosnider all COGS.

In case this is because you're missing the $15,300....

Revenue = 88,224 (55,140*1.6)

Costs = 30,840 + 15,300 + 1,350 + 1,120 + 825

Hello!

Don´t forget to take into consideration the remaining stock -that indeed has a value for the company, is not "sunk"-.

Profits can be calculated as follows:

PROFIT = Revenue – Import goods – Rent – Operations - Staff

PROFIT = 55140*1,6 - 55140 - 1350 - 82 5- 1120 = 29789

Hope it helps!

Cheers,

Clara

I agree with Ian's argumentation