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    honeycutt35's Avatar
    honeycutt35 Posts: 1, Reputation: 1
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    #1

    Jun 24, 2013, 02:52 PM
    Accounting Homework Help
    If a company sells 300 watches at $48.00 per watch and has variable cost of $ 18.00 per watch and fixed cost of $ 4,000.00. What is the projected profit?
    I need to know how to get the answer for the two (?) marks.

    Profit = Contribution Margin - Fixed Costs

    = ? ( $48 - $18 ) - $ 4,000.00
    = ? ( $30 ) - $ 4,000.00
    = $9,000 - $4,000
    = $5,000
    pready's Avatar
    pready Posts: 3,197, Reputation: 207
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    #2

    Jun 24, 2013, 03:53 PM
    Your answer is correct.

    Simply:

    (300 units sold * ($48 - 18)) - $4,000 = $5,000 gross profit.
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