S plc produces and sells three products, X, Y and Z. It has contracts to supply products X and Y, which will utilise all of the specific materials that are available to make these two products during the next period. The revenue these contracts will generate and the contribution to sales (c/s) ratios of products X and Y are as follows: 

Product Z has a c/s ratio of 25%.

The total fixed costs of S plc are £5.5 million during the next period and management have budgeted to earn a profit of £1 million. 

Required 

Calculate the revenue that needs to be generated by Product Z for S plc to achieve the budgeted profit.

Transcribed Image Text:

Product X Product Y Revenue £10 million £20 million C/S ratio 15% 10%