Question

TB MC Qu. 6-26 (Static) The profit equation is: 14 The profit equation is: 15 points Multiple Choice cBook (Unit price *Q) - (Unit variable costs) - Total fixed costs = Profit References O (Unit price ) - (Unit variable costs *) + Total fixed costs = Profit (Unit price - Unit variable costs - Total fixed costs) Q = Profit (Unit price * ) + (Unit variable costs *Q) + Total fixed costs = Profit

Answer 1

Total variable costs and total fixed costs should be deducted from the sales to get profit. Either fixed cost or variable costs are added to the sales in options 2, 4. Costs should not be added to get profit, hence options 2,4 are wrong. In option 3, total fixed costs are deducted from the unit price instead of total price. Hence, option 3 is wrong. Amount XX XX Particulars Sales (Unit price x Q) Less: Total Variable costs (Units variable costs x Q) Contribution margin Less: Total fixed costs Profit XX XX XX Hence, the correct option is: (Unit price x Q) - (Unit variable costs x Q) - Total fixed costs = Profit.