Question

A company sells a batch of 419 items for $57 each. The

items cost $23 to make at a fixed expense of $5,984 per
batch. How much profit does the company make on the
items?
Question 4
2 pts
A company sells items that have a variable expense of $68,

Answer 1

• Profit = $ 8,262

Step-by-step explanation:

1. Model:

i) Profit = Revenue - Cost

ii) Revenue = price × number of items

iv) Cost = variable cost + fixed expense

2. Solution

i) Revenue = $ 57 / item × 419 items

ii) Cost = $ 23 / item × 419 items + $5,984

iii) Profit = $ 57×419 - ($23×419 + $5,985)

Profit = $ 23,883 - ($ 9637 + $ 5,984) = $ 23,883 - $ 15,621

Profit = $ 8,262 ← answer