Company C produces toy trucks at a cost of \$5...
Company C produces toy trucks at a cost of \$5.00 each for the first 100 trucks and \$3.50 for each additional truck. If 500 toy trucks were produced by Company C and sold for \$10.00 each, what was Company C's gross profit?
• a)
\$2,250
• b)
\$2,500
• c)
\$3,100
• d)
\$3,250
• e)
\$3,500
Company C produces toy trucks at a cost of \$5.00 each for the first 10...
The company’s gross profit on the 500 toy trucks is the company’s revenue from selling the trucks minus the company’s cost of producing the trucks. The revenue is (500)(\$10.00) = \$5,000.The cost for the first 100 trucks is (100)(\$5.00) = \$500, and the cost for the other 400 trucks is (400)(\$3.50) = \$1,400 for a total cost of \$500 + \$1,400 = \$1,900. Thus, the company's gross profit is \$5,000 - \$1,900 = \$3,100.
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Company C produces toy trucks at a cost of \$5.00 each for the first 100 trucks and \$3.50 for each additional truck. If 500 toy trucks were produced by Company C and sold for \$10.00 each, what was Company Cs gross profit?a) \$2,250b) \$2,500c) \$3,100d) \$3,250e) \$3,500Correct answer is option 'C'. Can you explain this answer?
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