Nancy Company has sales of $100,000,variable costs of $5 per unit,fixed costs of $25,000,and a profit of $15,000.How many units were sold?
A)20,000
B)16,000
C)12,000
D)8,000

Question

Quizplus · Accepted Answer

The profit formula is Profit = Sales - Variable Costs - Fixed Costs. Given a profit of $15,000, sales of $100,000, and fixed costs of $25,000, we can calculate the total variable costs. First, find the total costs (variable + fixed) by subtracting the profit from sales: $100,000 - $15,000 = $85,000. Then, subtract the fixed costs from this amount to find the total variable costs: $85,000 - $25,000 = $60,000. Since the variable cost per unit is $5, divide the total variable costs by the cost per unit to find the number of units sold: $60,000 / $5 = 12,000 units.

Nancy Company Has Sales of $100,000,variable Costs of $5 Per