If our fixed expenses are $20,000, and sales are $550,000, and our unit selling price is $55, and our unit variable expense is $44; what would profits be?

Question

Business

Allisson

3 December, 06:23

If our fixed expenses are $20,000, and sales are $550,000, and our unit selling price is $55, and our unit variable expense is $44; what would profits be?

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Answers (1)

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Javier Forbes · Answer 1

Profit = Sales - Expenses

Expenses = Fixed + Variable

No. of units sold = $550,000 / 55 = 10,000

Variable expenses = $44 x 10,000 = $440,000

Expenses = 20,000 + 440,000 = $ 460,000

So, profit = 550,000 - 460,000 = $ 90,000.