Pluto Company sold 2000 units in October at a price of $40 per unit.The variable cost is $25 per unit.The monthly fixed costs are $14,000.What is the operating profit earned in October?

Question

Quizplus · Accepted Answer

The operating profit is calculated as (Sales - Variable Costs - Fixed Costs). Sales = 2000 units * $40 = $80,000. Variable Costs = 2000 units * $25 = $50,000. Operating Profit = $80,000 - $50,000 - $14,000 = $16,000.

Pluto Company Sold 2000 Units in October at a Price