JT Inc.produces gourmet frozen dinners for the airline industry.JT has fixed costs of $200,000 and variable costs of $8 per frozen dinner.The selling price per frozen dinner is $13 and JT plans to sell 150,000 frozen dinners this year.If JT sells the 150,000 frozen dinners they planned to sell what will JT's operating profit be this year?

Question

Quizplus · Accepted Answer

The operating profit can be calculated using the formula: Operating Profit = (Selling Price per Unit - Variable Cost per Unit) * Number of Units Sold - Fixed Costs. Here, it would be ($13 - $8) * 150,000 - $200,000 = $5 * 150,000 - $200,000 = $750,000 - $200,000 = $550,000.

JT IncProduces Gourmet Frozen Dinners for the Airline Industry