SOLUTION: Ben Gordon Company makes a product that sells for $80 per unit and has $63 per unit in variable costs. Annual fixed costs are $17,000. How much will profit increase if they sell

Algebra ->  Finance -> SOLUTION: Ben Gordon Company makes a product that sells for $80 per unit and has $63 per unit in variable costs. Annual fixed costs are $17,000. How much will profit increase if they sell       Log On


   

Question 889488: Ben Gordon Company makes a product that sells for $80 per unit and has $63 per unit in variable costs. Annual fixed costs are $17,000. How much will profit increase if they sell 1,000 additional units?

Answer by JulietG(1812) About Me  (Show Source):
You can put this solution on YOUR website!
The fixed cost doesn't change. And, apparently, the profit margin does not change, either.
80 - 63 = 17 profit per unit.
$17 * 1000 = $17,000 increased profit when selling an additional 1,000 units.