Suppose Bev's Bags makes large handbags and small handbags. Bev's sells 70,000 large bags for $45 each and 25,000 small bags for $15 each. If the company has total costs of $2,000,000, what is its profit?

Question

Quizplus · Accepted Answer

The profit is calculated by subtracting total costs from total revenue. Total revenue from large bags = 70,000 * $45 = $3,150,000. Total revenue from small bags = 25,000 * $15 = $375,000. Total revenue = $3,150,000 + $375,000 = $3,525,000. Profit = Total revenue - Total costs = $3,525,000 - $2,000,000 = $1,525,000.

Suppose Bev's Bags Makes Large Handbags and Small Handbags