Question

A company was the victim of several frauds that totaled approximately $10 million in one year. With a profit margin of 10 percent, and assuming that the company’s product sold for $1,000 per unit, how many additional units must the company sell to compensate for the fraud losses?

Answer 1

To recover $10 million in fraud losses at a 10% profit margin with a selling price of $1,000 per unit, the company must sell an additional 100,000 units.

Step-by-step explanation:

The question asks how many additional units a company must sell to recover losses from fraud, given certain financial figures. To find the number of additional units needed to compensate for the $10 million in fraud losses at a 10% profit margin, we first need to determine the profit per unit. With a selling price of $1,000 per unit, the profit per unit is $1,000 * 10% = $100. Therefore, the company needs to sell $10 million / $100 per unit = 100,000 additional units to cover the $10 million lost to fraud.

Answer 2

100,000

Step-by-step explanation:

Given that

Approximately frauds = $10 million

Profit margin = 10%

And the sale value of the product per unit = $1,000

So by considering the above information, the additional units is

= Approximately frauds × Profit margin

= $10 million × 10%

= 100,000

So by multiplying the approximate frauds with the profit margin we can get the additional units