A company will sell 100 units (x1000) of capacity from its product line. Each unit of capacity is worth $6 plus $4 per automation rating. The company will sell the capacity for 45% off. How much do they receive when the capacity is sold?

The company received $550,000 after the capacity was sold

Explanation:

Step 1: Determine the total number of units.

The expression for the total number of units is as follows;

Total number of units=number of capacity*number of units per capacity

where;

number of capacity=1,000

number of units per capacity=100 units

replacing;

Total number of units=100*1,000=100,000 units

Step 2: Determine the total cost of sales

Total cost of sales=Total number of units (Cost per capacity+cost per automation ring)

where;

Total number of units=100,000 units

Cost per capacity=$6

Cost per automation ring=$4

replacing;

Total cost of sales=100,000 (6+4) = $1,000,000

The company sold capacity at $1,000,000

Step 3: Determine the total cost of sales after discount

Total cost of sales after discount=1,000,000 - (45% of 1,000,000)

Total cost of sales after discount=1,000,000 - (0.45*1,000,000) = 1,000,000-450,000=$550,000

The company received $550,000 after the capacity was sold