Question

Problem: Big Al Plastics produces a variety of plastic items for packaging and distribution. One item, container #145, has had a low contribution to profits. Last year, 20,000 units of container #145 were produced and sold. The selling price of the container was $32 per unit, with a variable cost of $16 per unit and a fixed cost of $95,000 per year.

Answer 1

Profit = Revenue - Total cost

Total cost = variable cost + fixed cost

D А B С 1 2 3 Inputs 4 Unit Sale Price $ 32 5 Annual Fixed cost $ 95,000 6 Unit Variable Cost $ 16 7 8 Quantity made and sold 20000 9 10 Calculation and output 11 Annual revenue $ 640,000 12 Annual variable Costs $ 320,000 13 Annual Fixed cost $ 95,000 14 Annual total cost $ 415,000 15 Annual profit $ 225,000 16 17 10

The below formulsa were used to get the above answers

A B с 2 1 2 3 Inputs 4 4. 5 Unit Sale Price 32 Annual Fixed cost 95000 Unit Variable Cost 16 La 6 7 oc Quantity made and sold 20000 9 10 Calculation and output 11 12 13 14 15 16 17 Annual revenue =C8*C4 Annual variable Costs =C8*C6 Annual Fixed cost =C5 Annual total cost =C12+C13 Annual profit =C11-C14 do