Question

If Rolo Watches plans to sells 300 watches at $48 per watch and has variable costs of $20 per watch and fixed costs of $4,000, what is the projected profit? A) $4,000 B) $4,400 C) $8,400 D) $12,000

Answer 1

Profit= $4,400

Step-by-step explanation:

Giving the following information:

Sales= 300 units

Selling price= $48

Unitary variable cost= $20

Fixed cost= $4,000

First, we need to calculate the contribution margin:

Contribution margin= 48 - 20= $28 per unit

Now, the projected profit:

Profit= 300*28 - 4,000

Profit= $4,400