Sheridan Company produces hair brushes. The selling price is $15 per unit and the variable costs are $8 per brush. Fixed costs per month are $4800. If Sheridan sells 20 more units beyond breakeven, how much does profit increase as a result?
A) $140
B) $600
C) $300
D) $160

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silvinaarteaga silvinaarteaga · Answer 1 · 2019-10-27T21:52:05+01:00

Answer:

a) $140.

Explanation:

To calculate profit, we can use following formula:

Sales in $ - Cost of Goods Sold = Gross Profit.

As we need to know how much does the profit increase as a result, we calculate with 20 units and not with total sales.

Then, to give the answer to this question, sales are 20 units.

(20*$15)-(20*$8)=$140

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