Question

In: Accounting

A firm has sold 55,555 bicycles in 2020 that has variable cost of $199.55 for $299.99 each. The company's fixed cost for the year was $3,000,000.

A firm has sold 55,555 bicycles in 2020 that has variable cost of $199.55 for $299.99 each. The company's fixed cost for the year was $3,000,000. Show your work here below. To find Profit, compute the following first.

1. Total Variable Cost (TVC) ______

2. Total Cost (TC) _____

3. Total Revenue (TR) ______

4. Profit = ____

Expert Solution

Given Information

No of bicycles sold = 55,555

Selling price per bicycle = $299.99

Variable Cost per bicycle = $199.55

Total Fixed Cost = $3,000,000

(1)

Total Variable Cost (TVC) = No of bicycles sold*Variable Cost per bicycle

= 55555*199.55

= $11,086,000

(2)

Total Cost = Total Variable Cost + Total Fixed Cost

= 11,086,000 + 3,000,000

= $14,086,000

(3)

Total Revenue (TR) = No of bicycles sold * Selling Price per bicycle

= 55555*299.99

= $16,665,944

(4)

Profit = Total Revenue - Total Cost

=16,665,944 - 14,086,000

= $2,579,944

(1) Total Variable Cost (TVC) is $11,086,000

(2) Total Cost is $14,086,000

(3) Total Revenue (TR) is $16,665,944

(4) Profit is $2,579,944

Junaid answered 2 years ago

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