A Production Process Requires a Fixed Cost of $50,000

question 22

Short Answer

A production process requires a fixed cost of $50,000. The variable cost per unit is $25 and the revenue per unit is projected to be $45. Write a mathematical expression for total revenue.

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Definitions:

Gross Profit

The difference between sales revenue and the cost of goods sold before administrative and other expenses are deducted.

Periodic Inventory System

An inventory accounting system where updates to the inventory account are made at specified intervals, not on a continuous basis.

After-Tax Income

The net income remaining after all tax obligations have been satisfied.

Periodic Inventory System

An inventory system that updates inventory records and calculates cost of goods sold at the end of a reporting period, rather than continuously.