Sales Estimated Fixed cost Variable Fixed cost Total cost price Sales per unit cost $1.00 1,600,000 bags $400,000 $0.25 $0.40 $0.65 $2.00 800,000 bags $400,000 $0.50 $0.40 $0.90 The table shows the estimated sales for two different prices of bags of chips. Calculate the total profit when selling bags for $1 each.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Sales
Estimated
Fixed cost Variable
Fixed cost
Total cost
price
Sales
per unit
cost
$1.00 1,600,000 bags
$2.00 800,000 bags
$400,000
$0.25
$0.40
$0.65
$400,000
$0.50
$0.40
$0.90
The table shows the estimated sales for two different
prices of bags of chips. Calculate the total profit
when selling bags for $1 each.
A. $880,000
B. $1,200,000
C. $560,000
D. $1,600,000
=© 2003 - 2022 International Academy of Science. All Rights Reserved.
Transcribed Image Text:Sales Estimated Fixed cost Variable Fixed cost Total cost price Sales per unit cost $1.00 1,600,000 bags $2.00 800,000 bags $400,000 $0.25 $0.40 $0.65 $400,000 $0.50 $0.40 $0.90 The table shows the estimated sales for two different prices of bags of chips. Calculate the total profit when selling bags for $1 each. A. $880,000 B. $1,200,000 C. $560,000 D. $1,600,000 =© 2003 - 2022 International Academy of Science. All Rights Reserved.
Expert Solution
Step 1

Net profit is the amount of income that remains after all expenses have been met. The expenses may be fixed or variable in nature and must be reduced from Sales to arrive at the profit figures. 

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