Question

37. Southwest U's campus book store sells course packs for $16 each. The variable cost per pack is $10, and at current annual sales of 60,000 packs, the store earns $75,000 before taxes on course packs. How much are the fixed costs of producing the course packs? a. $125,000 b. $182, 250 c. $202,500 d. $225,000 e. $385,000 a $125,000 16x69009 = 969,000 3:3262,500 9687000- (lox 697000)-75281000

Answer 1

Let Fixed Cost be F

Variable cost = V = $10

Sales Price = S = $16

Profit = $75000

Number of packs sold = n = 60000

Hence, Profit = Sales - Costs

= Sales - Fixed Costs - Variable costs

= Sn - F - Vn

=> 75000 = 16*60000 - F - 10*60000

=> F = 16*60000 - 10*60000 - 75000 = $285000

None of the answer options are correct