Final answer:
The firm's operating profit with a contribution margin of $4.00 per unit for 40,000 units and fixed costs of $60,000 would be $100,000, which is option A.
Step-by-step explanation:
The operating profit for a firm that sells 40,000 units with a contribution margin of $4.00 per unit and fixed costs of $60,000 can be calculated by first determining the total contribution margin and then subtracting the fixed costs.
Total Contribution Margin = Contribution Margin per Unit × Number of Units Sold
Total Contribution Margin = $4.00 × 40,000
Total Contribution Margin = $160,000
Operating Profit = Total Contribution Margin – Fixed Costs
Operating Profit = $160,000 – $60,000
Operating Profit = $100,000
Therefore, the firm's operating profit at this level of sales volume would be $100,000, which corresponds to option A.