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14 May, 06:36

If our fixed expenses are $20,000, and sales are $550,000, and our unit selling price is $55, and our unit variable expense is $44; what would profits be?

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  1. 14 May, 07:42
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    Profit = Sales - Expenses

    Expenses = Fixed + Variable

    No. of units sold = $550,000 / 55 = 10,000

    Variable expenses = $44 x 10,000 = $440,000

    Expenses = 20,000 + 440,000 = $ 460,000

    So, profit = 550,000 - 460,000 = $ 90,000.
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