Question

A firm operated at 80% of capacity for the past year, during which fixed costs were $197,000, variable costs were 70% of sales, and sales were $900,000. Operating profit was
a.$73,000
b.$630,000
c.$58,400
d.$270,000

Answer 1

The correct answer is option A which is the operating profit will be $73000.

What is an expression?

Expression in maths is defined as the collection of the numbers variables and functions by using signs like addition, subtraction, multiplication, and division.

Given that:-

• A firm operated at 80% of capacity for the past year, during which fixed costs were $197,000, variable costs were 70% of sales, and sales were $900,000.

We will consider the following notations and will make the expression for operating profit.

P = profit

S = sales = $900000

F = Fixed cost = $197000

V = 07S = variable cost

So the expression will be given as:-

P = S - F - V

P = S - F - 0.7S

P = 9000000 - 1797000 - ( 0.7 x 9000000)

P = 703000 - 630000

P = $73000

Therefore the correct answer is option A which is the operating profit will be $73000.

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