IGCSE Economics Paper-1: Specimen Questions with Answers 64 - 64 of 64

Question 64

Question

MCQ▾

What will be the amount of profit if sales is 20,000 units, fixed cost is ₹ 1,00, 000, and Variable cost per unit is ₹ 24 and selling price is ₹ 40.

Choices

Choice (4)

a.

220,000

b.

300,000

c.

210,000

d.

200,000

Answer

a.

Explanation

The formula to calculate profit is:

Profit = Sales-Total cost

Total cost = Fixed cost Variable cost

Fixed cost is given in the question.

Variable cost will be,

VC

TC

Now, Total sales of the firm will be,

Selling price per unit Total number of units produced.

Sales

On putting the values in the formula of profit, the profit of the firm will be:

Profit

Thus, Profit of the firm will be = ₹ 220,000.

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