Sugar Corp has a selling price of $28, variable costs of $18 per unit, and fixed...

Sugar Corp has a selling price of $28, variable costs of $18 per unit, and fixed costs of $22,000. Maple expects profit of $308,000 at its anticipated level of production. If Sugar sells 5,800 units more than expected, how much higher will its profits be?

$58,000

$162,400

$308,000

$250,000

Expert Solution

The expected higher profit = Contribution Margin Per Unit * Additional Units

= (Sale Price Per Unit - Variable Cost Per Unit) * Additional Units

= ($28 - $10) * 5,800 units

= $10 * 5,800 units

= $58,000

The expected higher profit = $58,000

So correct answer is option (1) or $58,000

ekkarill92 answered 4 days ago

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Sugar Corp has a selling price of $28, variable costs of $18 per unit, and fixed...

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