You will need
- General knowledge of economic analysis
Instruction
1
First we need to define what is meant by "sales". The volume of sales is a comprehensive concept which includes all revenue received by the company for the sale of goods, works or services during the reporting period. To accurately determine the amount of sales necessary to rely on the notion of net sales. Net sales will be equal to the total cost of the realized goods, works or services, net of the realized goods, works or services on credit.
In the first place to calculate sales a look at common formula for calculating this value:
Rt(P) = TxP where:
Rt – total revenues;
P – amount of the issue;
T – the number of products sold.
From this formula it follows that Rt (total revenue) depends entirely on the volume of output (P) of goods, works or services and rates (T) on them.
In the first place to calculate sales a look at common formula for calculating this value:
Rt(P) = TxP where:
Rt – total revenues;
P – amount of the issue;
T – the number of products sold.
From this formula it follows that Rt (total revenue) depends entirely on the volume of output (P) of goods, works or services and rates (T) on them.
2
But if we consider an example of a firm with perfect competition policy, we get that T = const. In the second case, we obtain a model in which a function depends on the number of products sold.
3
And for the conclusion of drafting the perfect formula of calculating the volume of sales, we note that when calculating, consider the magnitude of total costs. Because the total cost depends entirely on the volume of production, i.e., costs increase according to the increase in production. In the end, we conclude that the volume of sales of goods, works or services by the company depends on volume of release of the goods, works or services, i.e., the number of sales of the company for a certain period is set by the number of produced goods.
C(P) = Rt(P)-Ct(P), where:
C(P) – volume of sales;
CT(P) – total costs.
C(P) = Rt(P)-Ct(P), where:
C(P) – volume of sales;
CT(P) – total costs.
Note
When planning sales, it is impossible to focus on a large number of release of goods, works or services. Because of the immense increase of production, increases costs, which can lead not only to reduced profits, but also cause losses.
Useful advice
In the calculation of the optimum volume of sales, the main is choosing the right volume of goods, works or services in which the company will receive the maximum profit for a given period.
