Assume a firm is developing, manufacturing, and selling a basic software package at $500 per copy.Raw materials and direct labor total $200 per copy.Fixed costs are $250,000.If the firm sells 5,000 units per year, what will be the operating profit?

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Quizplus · Accepted Answer

Operating profit = (Sales revenue - Variable costs - Fixed costs)= (5,000 * $500) - (5,000 * $200) - $250,000= $2,500,000 - $1,000,000 - $250,000= $1,250,000

Assume a Firm Is Developing, Manufacturing, and Selling a Basic