Question

_____ Sanderson sells a single product for $50 that has a variable cost of $30. Fixed costs amount to $5 per unit when anticipated sales targets are met. If the company sells one unit in excess of its break-even volume, profit will be:A. $15.B. $20.C. $50.D. an amount that cannot be derived based on the information presented.E. an amount other than those in choices "A," "B," and "C", but one that can be derived based on the information presented.

Answer 1

$20.

Step-by-step explanation:

Given that

Selling price per unit is $50

Variable cost per unit is $30

And, the fixed cost per unit is $5

As we know that the profit would be

= Selling price per unit - variable cost per unit - fixed cost per unit

It is given that if the company sells one unit extra so the profit would remain the same i.e $20 because the fixed cost remains the same

Hence, the correct option is B