Question

Anthony has purchased a new shipment of 50 Bluetooth earbuds that he plans to sell for $99.99 each. The manufacturer informs Anthony that each product will cost Anthony $52, but this does not include the cost of transportation. Even with the extra transportation costs, Anthony is not worried. He believes he can sell all 50 earbuds by the end of the month. After adding up inventory, transportation, storage, and other costs, he determines that his total costs will be $3,750. Refer to Scenario 19.4. Anthony thinks that he can sell all 50 Bluetooth earbuds for $99.99 each. His total costs are estimated to be $3,750. However, by the end of the month Anthony has only sold 33 earbuds. What is his profit? a. $1,249.50 b. $133.53 c. $450.44 d. -$1,249.50 e. -$450.33

Answer 1

The answer is E. -$450.33

Answer 2

$824.67

Step-by-step explanation:

Anthony spent $3,750 in 50 Bluetooth earbuds, therefore each earbud costs $75, his total cost of goods sold = $75 x 33 = $2,475. If Anthony was able to sell 33 earbuds, his total revenue = $3,299.67.

Anthony's income statement:

total revenue = $3,299.67

- COGS = ($2,475.00)

profit = $824.67