A division of Chapman Corporation manufactures a pager. The weekly fixed cost for the division is $15,000, and the variable cost for producing x pagers/week is dollars. The company realizes a revenue of dollars from the sale of x pagers/week. What is the profit for the company if 2,000 units are produced and sold each week?

A) $112,000
B) $117,000
C) $107,000
D) $102,000
E) $97,000

Question

A division of Chapman Corporation manufactures a pager. The weekly fixed cost for the division is $15,000, and the variable cost for producing x pagers/week is  dollars. The company realizes a revenue of   dollars from the sale of x pagers/week. ​What is the profit for the company if 2,000 units are produced and sold each week?
​
A) $112,000 
B) $117,000 
C) $107,000 
D) $102,000 
E) $97,000

Quizplus · Accepted Answer

To find the profit, we need to subtract the total cost (fixed cost + variable cost) from the revenue:

Total cost = fixed cost + variable cost
Variable cost = 11eb651f_cb9a_7162_b0a1_e76fb8574451_TB8255_11 * 2,000 = 22,000eb651f_cb9a_7162_b0a1_e76fb8574451_TB8255_11
Total cost = $15,000 + $22,000eb651f_cb9a_7162_b0a1_e76fb8574451_TB8255_11 = 37,000eb651f_cb9a_7162_b0a1_e76fb8574451_TB8255_11
Revenue = 11eb651f_cb9a_7164_b0a1_316604a26b6b_TB8255_11 * 2,000 = 22,000eb651f_cb9a_7164_b0a1_316604a26b6b_TB8255_11

Profit = Revenue - Total cost
Profit = 22,000eb651f_cb9a_7164_b0a1_316604a26b6b_TB8255_11 - 37,000eb651f_cb9a_7162_b0a1_e76fb8574451_TB8255_11
Profit = -15,000eb651f_cb9a_7162_b0a1_e76fb8574451_TB8255_11

Therefore, the company is operating at a loss of $15,000 per week by producing and selling 2,000 units. None of the given answer choices are correct.

A Division of Chapman Corporation Manufactures a Pager