Question

Billy's Bean Bag Emporium produced 300 bean bag chairs but sold only 275 of the units it produced. The average cost of production for each unit of output produced was $100. The price for each of the 275 units sold was $95. Total profit for Billy's Bean Bag Emporium would bea. -$3,875.b. $26,125.c. $28,500.d. $30,000.

Answer 1

Answer:

The correct answer is A) -$3,875

Explanation:

Total profit is equal to total revenue minus total costs

Revenue

• Sales Revenue = 275 units sold x $95 sale price

                                  = $26,125

Expenses

• Production costs = 300 units produced x $100 cost per unit

                                    = $30,000

Total profit

• $26,125 - $30,000 = $-3,875