Question

If revenue = $100, fixed costs = $20, labor costs = $40, and other variable costs = $5, then profit =________

Answer 1

To calculate profit, we can use the formula:

\[
\text{Profit} = \text{Revenue} - \text{Total Costs}
\]

Where Total Costs is the sum of fixed costs and variable costs (labor costs + other variable costs).

Given:
- Revenue = $100
- Fixed costs = $20
- Labor costs = $40
- Other variable costs = $5

First, we calculate the total variable costs:

\[
\text{Total Variable Costs} = \text{Labor Costs} + \text{Other Variable Costs} = 40 + 5 = 45
\]

Next, we calculate the Total Costs:

\[
\text{Total Costs} = \text{Fixed Costs} + \text{Total Variable Costs} = 20 + 45 = 65
\]

Now we can find the Profit:

\[
\text{Profit} = \text{Revenue} - \text{Total Costs} = 100 - 65 = 35
\]

Therefore, the profit is **$35**.