Profit is the unit contribution margin multiplied by the number of units minus the fixed component of the total costs (TC).

Question

Quizplus · Accepted Answer

Profit is calculated as the difference between total revenue and total costs. Total revenue is equal to the unit contribution margin multiplied by the number of units sold. Total costs are equal to the fixed costs plus the variable costs. Therefore, profit is equal to the unit contribution margin multiplied by the number of units minus the fixed costs.

Profit Is the Unit Contribution Margin Multiplied by the Number