Question

Suppose Bev's Bags makes large handbags and small handbags. They sold 70,000 large bags for $45 each and 25,000 small bags for $15 each. If the company had total costs of $2,000,000, what was the profit for this company

Answer 1

$1525000

Step-by-step explanation:

Given: Selling price of each large bag is $45

Quantity of large bags= 70000

Selling price of each small bag is $15

Quantity of small bags= 25000.

Total cost to the company is $2000000.

First calculating total revenue generated by the company.

Revenue=
`Selling\ price* quantity`

⇒ Revenue=
`( 70000* \$45 + 25000* \$ 15)`

⇒ Revenue=
`\$ 3150000+ \$375000`

∴ Revenue= $3525000

Now, computing profit for the company.

Profit=
`Revenue- cost`

⇒ Profit=
`\$ 3525000- \$ 2000000`

∴ Profit=
`\$ 1525000`

Hence, $1525000 is the profit for the company.