Posted by fay on .
The Math-Is-Fun T-shirt Company manufactures and sells screen-printed t-shirts. The fixed costs of operation for the company are $75,750 per month. T-shirts are sold to wholesale buyers for $8.99 each, but only cost the company $3.20 each to produce. If the T-shirt Company manufactures and sells 50,000 T-shirts in July, what will be their net profit for the month?
cost: 75750 + 50000*3.20
profit: 50000*(8.99-3.20) - 75750 = 213,750
Technically, this is the gross profit. If you subtract other costs like taxes, insurance, etc. what's left is the net profit. Gross profit is just based on the revenue/cost of goods, and does not include other, maybe variable costs.