In CVP analysis profit is calculated by subtracting total costs which are both fixed costs and variable costs from total revenue which is gotten from total sales. In our current case the total revenue from Video game sales amount to $25000000. The cost of advertising which can be assumed to be the fixed cost amounted to $6000000; the variable costs amounted to $5000000 while the production costs were $14000000 taking the total costs to 25000000. This cost is equal to the total cost hence the firm makes no profit. Where the sales are equal to the cost of production
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