The ABC Corporation is considering introducing a new product,which will require buying new equipment for a monthly payment of $5,000.Each unit produced can be sold for $20.00.ABC incurs a variable cost of $10.00 per unit.Suppose that ABC would like to realize a monthly profit of $50,000.How many units must they sell each month to realize this profit?
A)500 units
B)450 units
C)4500 units
D)5000 units
E)5500 units

Question

Quizplus · Accepted Answer

To calculate the number of units that ABC Corporation needs to sell to realize a monthly profit of $50,000, we can use the following formula:

Profit = (Selling Price x Quantity) - (Variable Cost x Quantity) - Fixed Cost

Plugging in the given values, we get:

$50,000 = ($20 x Q) - ($10 x Q) - $5,000
where Q is the quantity of units sold

Simplifying the equation, we get:

$45,000 = $10 x Q
Q = 4,500 units

Therefore, ABC Corporation needs to sell 4500 units each month to realize a monthly profit of $50,000. Hence, the best choice is C).

The ABC Corporation Is Considering Introducing a New Product,which Will