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