= quantity (number of units required) FC = Fixed Cost LC = Labor cost per unit MC = Material cost per unit VC = Variable cost per unit TC(q) = Total cost of manufacturing q units R = revenue per unit TR(q) = Total Revenue from selling q units P = profit Given the fact that material and labor cost per unit are contributing to come up with the variable cost per unit, therefore: VC = LC MC The total cost will be derived by: TC( q ) = FC (VC x q ) While the total revenue can be derived by: TR( q ) = R x q To get profit total cost must be subtracted from the total revenue: P = TR( q ) - T C( q )