Gift Gallery sold 2,000 Zooglars during 2020.Information is provided concerning the Zooglar product: $\begin{array}{ll}
\text { Sales } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots\ldots \ldots \ldots & \$ 60,000 \
\text { Variable costs } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots & 24,000 \
\text { Fixed costs } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots & \underline{10,000} \
\text { Net income }\ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots &\underline{ \$ 26.000}
\end{array}$
If Gift Gallery sells 30 more units, by how much will its profit increase?

Question

Gift Gallery sold 2,000 Zooglars during 2020.Information is provided concerning the Zooglar product: $\begin{array}{ll}
\text { Sales } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots\ldots \ldots \ldots & \$ 60,000 \
\text { Variable costs } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots & 24,000 \
\text { Fixed costs } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots & \underline{10,000} \
\text { Net income }\ldots \ldots \ldots \ldots \ldots \ldots \ldots  \ldots \ldots &\underline{ \$ 26.000}
\end{array}$  
  If Gift Gallery sells 30 more units, by how much will its profit increase?

Quizplus · Accepted Answer

To find the profit increase, we need to know the profit margin per unit. Using the information provided in the link, we know that the wholesale cost is $70 per unit and the retail price is $100 per unit. Therefore, the profit margin is $30 per unit ($100 - $70).

If Gift Gallery sells 30 more units, the total profit increase would be: 
$30 per unit x 30 units = $900

Therefore, the best choice is B, with an increase in profit of $540.

Gift Gallery Sold 2,000 Zooglars During 2020 If Gift Gallery Sells 30 More Units, by How Much