You are given data in the table below: Prices are 30,24,18,12 and 6. The quantit

Question

You are given data in the table below: Prices are 30,24,18,12 and 6. The quantity is 500 for each price respectively.Fixed cost is made up of two portions one being $ 8000 and the other $ 4000. Total cost $19500. How much is the variable cost? Calculate profit. You are given data in the table below: Prices are 30,24,18,12 and 6. The quantity is 500 for each price respectively.Fixed cost is made up of two portions one being $ 8000 and the other $ 4000. Total cost $19500. How much is the variable cost? Calculate profit.

Explanation / Answer

Variable cost is total cost - fixed cost = 19500 - 4000 - 8000 = 7500 for 500 units and so variable cost is 7500/500 = 15 per unit. Profit = revenue - cost. Revenue is price x quantity and so for ech price revenue is R = 500*price

Profit when price is 30 is = 30*500 - 19500 = -4500

Profit when price is 24 is = 24*500 - 19500 = -7500

Profit when price is 18 is = 18*500 - 19500 = -10500

Profit when price is 12 is = 12*500 - 19500 = -13500

Profit when price is 6 is = 6*500 - 19500 = -16500

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