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) cannot tell, insufficient information

Question

Quizplus · Accepted Answer

To find the cost per loaf, we need to add up all of Pamela's expenses and divide by the number of loaves produced: 
$100 (flour and yeast) + $600 (wages) + $50 (interest) + $100 (taxes) + $75 (for the scrapped machine) = $925 total expenses 
$925 total expenses / 500 loaves = $1.85 cost per loaf

Since Pamela's profit is $75, we can subtract that from the total expenses to find the total revenue: 
$925 total expenses - $75 profit = $850 total revenue

Finally, we divide the total revenue by the number of loaves produced to find the selling price per loaf: 
$850 total revenue / 500 loaves = $1.70 selling price per loaf

Therefore, the answer is C) $2.00 per loaf (the closest option to $1.70).

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