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

Question 64

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Question

MCQ▾

What will be the amount of profit if sales is 20,000 units, fixed cost is Rs. 1,00,000, and Variable cost per unit is Rs. 24 and selling price is Rs. 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 = Rs. 220,000.

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