Task Sheet 14

SALES CALCULATION - ISSUE 2

You must now make some decisions for the second issue of your magazine. Make these decisions
and justify them before entering the information into the yellow cells. Then fill in the profit and loss
account at the bottom of the page.

Sales Calculation - Issue 2 Profit Calculation

Price Copies produced 50,000

Copies Produced 50,000 Production cost/copy £0.20
Variable production cost £10,000
Advertising Expenditure £110,000
Fixed Costs £100,000
Distribution Advertising Costs £110,000
Mail order put 1 in box
Newsagents put 2 in box 1 Free gift 1
Total Free gift Cost £12,500
Type of magazine
Mainly stories put 1 in box Distribution Costs
Mainly pictures put 2 in box 1 Per copy sold £0.10
Copies Sold #N/A
If free gift included, put 1 in box 1 Total Distribution Costs #VALUE!
Copies sold of your first issue 200,000
Total Demand for your magazine is #N/A Total cost #VALUE!
Copies Produced 50,000 Sales Revenue #N/A
Copies Sold #N/A Net Profit #VALUE!

Use the space below to give the reasons for your decisions for issue 2

The Profit and Loss Account

Use the information above to fill in the yellow cells below to create a profit and loss
account for issue 2 of your magazine.

Sales Revenue

Variable production costs

Promotion cost (free gift)
Distribution cost
Total cost of sales
Gross Profit

Factory Fixed Costs

Advertising
Total Fixed costs
Net Profit
Appropriation Account
1. Tax If you made any net profit, then pay a
2. Dividends quarter to shareholders, a quarter in tax,
3. Retained Profit and keep the rest to re invest.