Last year, BruceCo sold 1000 coffee cups for $10 each. This year, the company is planning on selling 1500 coffee cups. In order to cover the additional investment they will charge $10.50 for the first 500 cups, $10.25 for the second 500 cups and $10 for the last 500. Each cup costs $4.70 to produce. What is the average profit if they sell all 1500 cups?

Average profit=$8,325

Explanation:

The Average profit can be expressed as;

Average profit=Total sales-Expenses

where;

Total sales=Number of cups*price per cup

Total sales = (10.5*500) + (10.25*500) + (10*500)

= (5250+5125+5000)

Total sales=$15,375

Expenses=Cost per cup*number of cups = (4.7*1500)

=$7,050

Replacing;

Average profit=Total sales-Expenses

Average profit = (15,375-7,050) = $8,325

Average profit=$8,325