Question
The answer to this problem for profit is 2,172,500, can someone please explain how each calculation was done? Tory Company sells a single product. Troy
The answer to this problem for profit is 2,172,500, can someone please explain how each calculation was done? Tory Company sells a single product. Troy estimates demand and costs at various activity levels as follows:
Units Sold Price Total Variable Costs Fixed Costs
120,000 $48 $3,000,000 $1,000,000
148,500 $45 $3,510,000 $1,000,000
160,000 $40 $4,000,000 $1,000,000
180,000 $35 $4,500,000 $1,000,000
200,000 $30 $5,000,000 $1,000,000
How much profit will Troy have if a price of $45 is charged? Answer 2,172, 500
Total Variable Costs/ Units Sold = Variable Cost Per Unit Price per unit Variable Cost per unit = Contribution margin per Unit per Contribution Margin per Unit ^ Units Sold = Total Contribution Margin Profit = Total Contribution Margin Fixed Costs
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