The owner of Firewood To Go is considering buying a hydraulic wood splitter which sells for $50,000.He figures it will cost an additional $150 per cord to purchase and split wood with this machine,while he can sell each cord of split wood for $200. What would the potential profit be if he were to split 4,000 cords of wood with this machine?

Question

Quizplus · Accepted Answer

The cost to split 4,000 cords is $150 per cord, totaling $600,000. The revenue from selling 4,000 cords at $200 each is $800,000. The initial cost of the machine is $50,000. Therefore, the profit is $800,000 (revenue) - $600,000 (variable costs) - $50,000 (fixed cost) = $150,000.

The Owner of Firewood to Go Is Considering Buying a Hydraulic