Ships Ahoy is a small company that makes model sailboat kits priced at $120 each. (There is no quantity discount.)The cost of the materials that go into each kit is $45. It costs $5 in labour to assemble a kit. The company has monthly expenses of $1,000 for rent and insurance, $200 for heat and electricity, $500 for advertising, and $3,500 for the monthly salary of its owner. Last month the company sold 150 kits. Ships Ahoy's total revenue for the month was:
A)$10,500.
B)$6,750.
C)$18,000.
D)$7,500.

Question

Quizplus · Accepted Answer

To find the total revenue, we need to calculate the total amount earned from selling all the sailboat kits.

Revenue per kit = Selling price of kit - Cost of materials - Labour cost 
Revenue per kit = $120 - $45 - $5 
Revenue per kit = $70

Total revenue = Revenue per kit * Number of kits sold 
Total revenue = $70 * 150 
Total revenue = $10,500

Therefore, the total revenue for the month was $10,500, which corresponds to choice letter C.

Ships Ahoy Is a Small Company That Makes Model Sailboat