Final answer:
To calculate the profit of product ABC, we can use the formula: Revenue = Cost / (1 - Margin). The company's margin is 25%. The profit is the revenue minus the cost. Profit = $5,000
Step-by-step explanation:
To find the profit of the product, we need to calculate the revenue and subtract the cost. Given that the cost of producing product ABC is $15,000 and the company's margin is 25%, we can calculate the revenue using the formula:
Revenue = Cost / (1 - Margin)
Substituting the values into the formula, we get:
Revenue = $15,000 / (1 - 0.25)
Revenue = $15,000 / 0.75
Revenue = $20,000
To calculate the profit, we subtract the cost from the revenue:
Profit = Revenue - Cost
Profit = $20,000 - $15,000
Profit = $5,000