the cost to produce one compact disc is $125 plus a one-time fixed cost of $2400. The revenue received from selling one compact disc is $10.
To calculate the cost to produce one compact disc, we need to add the variable cost ($125) to the fixed cost ($2400):
Cost = Variable cost + Fixed cost
Cost = $125 + $2400
Cost = $2525
Therefore, the cost to produce one compact disc is $2525.
The revenue received from selling one compact disc is $10.
Profit = Revenue - Cost
Profit = $10 - $2525
Profit = -$2515
Therefore, the profit from selling one compact disc is -$2515. This means that for every CD sold, the company is losing $2515.
To calculate the profit (or loss) per compact disc, we need to subtract the cost of production from the revenue received. Here are the steps to follow:
1. Calculate the total cost per unit:
Total cost per unit = Variable cost per unit + Fixed cost per unit
In this case, the variable cost per unit is $125, and the fixed cost per unit is $2400.
Total cost per unit = $125 + $2400 = $2525
2. Calculate the profit (or loss) per unit:
Profit (or loss) per unit = Revenue per unit - Total cost per unit
In this case, the revenue received from selling one compact disc is $10.
Profit (or loss) per unit = $10 - $2525 = -$2515
Since the result is negative, it indicates a loss of $2515 per compact disc.
Therefore, each compact disc results in a loss of $2515.
To determine the profit from selling one compact disc, subtract the cost to produce one compact disc from the revenue received from selling one compact disc.
Profit = Revenue - Cost
The revenue received from selling one compact disc is $10.
The cost to produce one compact disc is $125.
Profit = $10 - $125
Profit = -$115
Therefore, the profit from selling one compact disc is -$115.