Question

A1 electronics has one product in its ending inventory. per unit data consist of the following: cost, 25; replacement cost,23; selling price, 35; selling costs,8. the normal profit is 30. What is the profit per unit?

1) 5
2) 7
3) 10
4) 12

Answer 1

None of the provided options (5, 7, 10, 12) match the calculated profit per unit of $2 for the A1 electronics product based on the given data. The formula for profit per unit is Selling Price minus the sum of Cost and Selling Costs.

Step-by-step explanation:

The student's question is about calculating the profit per unit for a product sold by A1 electronics. Considering the cost to be $25, the replacement cost $23, the selling price $35, and selling costs $8 per unit, with a normal profit of $30. To calculate the profit per unit, we use the formula:

Profit per Unit = Selling Price - (Cost + Selling Costs)

Substituting in the given values:

Profit per Unit = $35 - ($25 + $8) = $35 - $33 = $2

However, considering a normal profit of $30, this would indicate the profit expected under normal circumstances. With our calculated profit per unit being lower than the normal profit, it suggests that the company is making less than the expected profit. But according to the list of options provided by the student, none of them matches the calculated profit of $2.

This suggests there may be an error in the provided information or the understanding of the term 'normal profit' in this context. Typically, the term 'normal profit' refers to the opportunity cost of using resources, which is often included in the calculation of total costs. Since it's not used in the profit calculation directly, we focus on the immediate cost, selling costs, and selling price.