Question

Jo owns a gas station in Ponder, Texas. Last year, Jo sold 5,000 gallons of

gasoline at a price of $1 a gallon. Jo's average cost of producing the
5,000-gallons of gasoline was 50 cents a gallon. Did Jo earn a profit? If so,
how much?

Answer 1

Jo earned a profit of $2500.

Explanation:

Given that:

Selling price of 5000 gallons = $1 per gallon

Total selling price = 1 * 5000 = $5000

Production cost = 50 cents per gallon = $0.5 per gallon

Total production cost = 0.5 * 5000 = $2500

Production cost < Selling cost

Therefore,

Jo earned profit on gasoline.

Profit = Selling cost - Production cost

Profit = 5000 - 2500

Profit = $2500

Hence,

Jo earned a profit of $2500.