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4 July, 07:41

The "On the Road" bicycle manufacturing company sold 500 bicycles last year. Their fixed costs were $10 per unit, and their variable costs were $15 per unit. If each bike sells for $100, most likely the company had a

A. total profit of $37,000.

B. total profit of $50,000.

C. total loss of $37,000.

D. total loss of $50,000.

E. the company broke even.

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Answers (1)
  1. 4 July, 07:45
    0
    (A) A total profit of $37,000

    Explanation:

    Number of bicycles sold last year = 500

    Assuming the company only manufactured 500 bicycles last year.

    Fixed cost per unit = $10

    Variable cost per unit = $15

    Total cost per unit = fixed cost + variable cost = $10 + $15 = $25

    Total cost for 500 units of bicycles manufactured = 500 * $25 = $12,500

    Selling price per bike = $100

    Total revenue for 500 bikes sold = 500 * $100 = $50,000

    The company made a profit because the total revenue generated is greater than the total cost incurred.

    Total profit = total revenue - total cost = $50,000 - $12,500 = $37,500

    The company most likely had a profit of $37,000
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Home » Business » The "On the Road" bicycle manufacturing company sold 500 bicycles last year. Their fixed costs were $10 per unit, and their variable costs were $15 per unit. If each bike sells for $100, most likely the company had a A. total profit of $37,000. B.
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