Question

XYZ corporation produced 300 units of output but sold only 275 of the units it produced. The average cost of production for each unit of output produced was $100. Each of the 275 units sold was sold for a price of $95. Total profit for the XYZ corporation would be

a. -$3,875.
b. $26,125.
c. $28,500.
d. $30,000.

Answer 1

profit = - $3875

so correct option is a. -$3,875

Step-by-step explanation:

given data

produced = 300 units

sold = 275 units

average cost of production = $100

each 275 units sold price = $95

to find out

Total profit

solution

we know that profit is express as

profit = total revenue - total cost ..................1

here total revenue = 275 × $95

total revenue = $26125

and total cost = 300 × $100

total cost = $30000

so from equation 1

profit = total revenue - total cost

profit = $26125 - $30000

profit = - $3875

so correct option is a. -$3,875