What would the operating profit or loss associated with production?

Business & Finance
Tutor: None Selected Time limit: 1 Day

The Poseidon Swim company produces swim trunks. The average selling price for one of their swim trunks is $61.55. The variable cost per unit is $19.99, Poseidon swim has average fixed cost per year of $17,351. 

What would the operating profit or loss associated with the production and sale of 480 swim trunks?

Oct 3rd, 2015

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                                                         Poseidon Swim Company

                                                                Income Statement

                                                        For the year_______________

          Sale ($61.55 *480 units)                                                                           $29,544.00

          Less cost of goods sold:

             Variable cost ($19.99*480 units)                                          $9,595.2

              Fixed cost per year                                                              17,351.0      26,946.20

           Operating profit for the year                                                                       $ 2,597.80

Please let me know if you need any clarification. I'm always happy to answer your questions.
Oct 3rd, 2015

did you subtract the $29,544 - $9,595.2 to get $26,946.20? How did you end up with $2,597.80?

Oct 3rd, 2015

I added variable cost $9,595.20 + $17,351.00 fixed cost is equal to $26,946.20 total production cost.

Variable cost  ($19.99 480 units)                  $9,595.20

Add Fixed cost for the year                           17,351.00       

Total production cost                                   $26,946.20    

Total sale value ($61.55*480)                     $29,544.00

Less total cost of production                         26,946.20

Operating profit from 480 units                    $ 2,597.80


                 

 

Oct 3rd, 2015

I added variable cost $9,595.20 + $17,351.00 fixed cost is equal to $26,946.20 total production cost.

Variable cost  ($19.99 480 units)                  $9,595.20

Add Fixed cost for the year                           17,351.00       

Total production cost                                   $26,946.20    

Total sale value ($61.55*480)                     $29,544.00

Less total cost of production                         26,946.20

Operating profit from 480 units                    $ 2,597.80


                 

 

Oct 3rd, 2015

Awesome, thank you!

Oct 3rd, 2015

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