Question

Laser Products plans to sell 5000 printers this year at a price of $100 each. Fixed expenses of $100,000 and variable expenses of $28 per printer have been calculated. Laser Products will show a net income (profit) of $________ if they meet their sales number.

a) -$399,972
b) -$260,000
c) -$40,000
d) None of the above

Answer 1

The net income (profit) of Laser Products, if they meet their sales number, is $260,000.

Step-by-step explanation:

To calculate the net income (profit) of Laser Products, we need to subtract the total expenses from the total revenue. The total revenue can be calculated by multiplying the number of printers sold (5000) by the price per printer ($100), which equals $500,000. The total expenses can be calculated by adding the fixed expenses ($100,000) to the variable expenses per printer ($28 x 5000 = $140,000). Therefore, the total expenses are $100,000 + $140,000 = $240,000. Subtracting the total expenses from the total revenue, we get $500,000 - $240,000 = $260,000.

Therefore, the net income (profit) if Laser Products meets their sales number is $260,000.