Company C produces toy trucks at a cost of 5.00USD each for the first 100 trucks and 3.50USD for...

Question

Company C produces toy trucks at a cost of 5.00USD each for the first 100 trucks and 3.50USD for each additional truck. If 500 toy trucks were produced by Company C and sold for 10.00USD each, what was Company C's gross profit?

GMAT Panda · Accepted Answer

Company C's gross profit was 3100USD, corresponding to option C. We use the standard profit formula to relate profit, revenue, and cost. Profit = Revenue - Cost We calculate total revenue by multiplying the selling price by the quantity sold. Revenue = 10.00 500 = 5000.00 We calculate total cost by summing the cost for the first 100 trucks at 5.00USD each and the additional 400 trucks at 3.50USD each. 100 5.00 = 500.00 400 3.50 = 1400.00 500.00 + 1400.00 = 1900.00 We subtract total cost from total revenue to find gross profit. Profit = 5000.00 - 1900.00 = 3100.00

Explanation	Calculations	Help
$We use the standard profit formula to relate profit, revenue, and cost.$	$Profit = Revenue - Cost$
$We calculate total revenue by multiplying the selling price by the quantity sold.$	$Revenue = 10.00 \times 500 = 5000.00$
$We calculate total cost by summing the cost for the first 100 trucks at 5.00USD each and the additional 400 trucks at 3.50USD each.$	$100 \times 5.00 = 500.00 400 \times 3.50 = 1400.00 500.00 + 1400.00 = 1900.00$
$We subtract total cost from total revenue to find gross profit.$	$Profit = 5000.00 - 1900.00 = 3100.00$

Question

Options:

Steps

Final Answer

Question

Options:

Steps

Final Answer

Related questions