Pamela's bakery produces 500 loaves of bread in a given year.Pamela pays $100 for flour and yeast,pays $600 in wages,pays $50 in interest on an existing loan,and pays $100 in taxes to the government.One of Pamela's bread slicing machines,which cost $75 each,wears out over the course of the year and must be scrapped.Pamela's profit for the year equals $75.Pamela's bread,therefore,sells for
A) $0.50 per loaf.
B) $1.00 per loaf.
C) $2.00 per loaf.
D) $1.50 per loaf.
E) cannot tell, insufficient information.

Question

Quizplus · Accepted Answer

To find the selling price per loaf, calculate total costs and add profit: $100 (flour and yeast) + $600 (wages) + $50 (interest) + $100 (taxes) + $75 (machine depreciation) = $925. Add profit of $75 to get $1000 total revenue. Divide by 500 loaves: $1000 / 500 = $2.00 per loaf.

Pamela's Bakery Produces 500 Loaves of Bread in a Given