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12 April, 20:12

When Bread and Butter Bakers got the newest batch of flour, they noticed a price increase of $1.00 per pound of flour (double their old price!). Bread and Butter plans to use 10,000 pounds of flour per month at a price of $2.00 per pound with an additional variable expense per loaf of $1.50. Their fixed costs are $13,500 per month and they hope to sell 10,000 loaves of bread at $6.00 per loaf. If they meet their sales goal what is their net profit per mont?

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  1. 12 April, 20:28
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    If Bread and Butter Bakers meet their sales goal, their net profit per month is $11,500

    Explanation:

    Bread and Butter plans to use 10,000 pounds of flour per month at a price of $2.00 per pound with an additional variable expense per loaf of $1.50. They hope to sell 10,000 loaves of bread.

    Total variable expense = 10,000 x $2.00 + 10,000 x $1.50 = $35,000

    Total sales = 10,000 x $6.00 = $60,000

    Net profit = Total sales - Total variable expense - fixed costs = $60,000 - $35,000 - $13,500 = $11,500
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