Weatherwear estimates that every unit sold and returned due to defect costs the company $200 in profits. Approximately what woul
d Weatherwear’s total profits have been in Year 5 if all units sold and returned due to defect had been eliminated?
1 answer:
Answer: С. $9.5 million
Explanation:
The units that were sold and later returned due to defect in Year 5 total;
= 688 + 124 + 536 + 28 + 101 + 8 + 206 + 28 + 120 + 1,050 + 30
= 2,919 units were sold and later returned
Each unit costs the company $200 in profits so;
= 2,919 * 200
= $583,800
Weatherwear made a total profit of $8.9 million in Year 5.
If the defective units had been eliminated then the loss as a result of the units would have been added to the profits as;
= 8,900,000 + 583,800
= $9,483,800
= $9.5 million
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