Healthy food Inc sells 50lb bags of grapes to the military for $10 a bag.

Question

The fixed costs of this operation are $80,000 while the variable costs of the grapes are $10 per lb.

Calculate the profit or loss on 12,000 bags and on 25,000 bags. Can you please walk me through on how to come to the answer. I am so confused.

Answer 1

How much will 12,000 bags of grapes bring in sales? 12,000 bags x $10/bag = $120,000
The profit is the sales - fixed costs = 120.000 - 80,000 = $40,000 profit.

Do the same for the 25,000 bags. Post your work and detail exactly what you don't understand if you get stuck.

Answer 2

What about the variable costs of $10 per pound?

Answer 3

I read that as $10/bag and not $10/lb. Disregard my work. Thanks Ms. Sue.