Match Year-2 profit to Year-1

Q: Match Year-2 profit to Year-1

This question evaluates unit economics, basic profit modeling, and algebraic manipulation to relate price, variable cost, fixed costs, and sales volume.

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Statistics & Math questions require understanding of core concepts and practice. PracHub provides solutions with explanations to help you master statistics & math interviews.

Q: What difficulty level is this interview question?

This is a easy difficulty Statistics & Math question, commonly asked during Technical Screen rounds at Capital One.

Q: What role is this question designed for?

This question is commonly asked for Data Scientist candidates at Capital One during technical interviews.

Question

Target Profit Volume Across Two Years

Context

You sell only classic burgers. Year 1 has negligible fixed costs; Year 2 introduces new fixed costs. The unit economics (price and variable cost per unit) stay the same in Year 2. Find how many units you must sell in Year 2 to match Year 1's total (absolute) profit.

Given

Year 1:
- Price per unit = $4
- Variable cost per unit = $1
- Volume = 231 million units
- Fixed costs ≈ 0
Year 2:
- Same price and unit cost as Year 1
- Fixed costs:
  - Base fixed cost = $375 million per year
  - Vegan program training = $60 million per year
  - Supplier retainer = $2.25 million per month

Task

Assuming you still sell only classic burgers in Year 2, how many total units must you sell in Year 2 to match Year 1's absolute profit? Show the equation and the solution.

Match Year-2 profit to Year-1

Quick Overview

Match Year-2 profit to Year-1

Target Profit Volume Across Two Years

Context

Given

Task

Write your answer