Question

Brenda’s Boards manufactures skateboards. Each skateboard sells for $45 and includes the following expenses: $3 for the wheels and mounts, $1 for the plastic board, $1 for the paint, and $10 for the labor. What is the total profit the company earns after selling 100 boards?

Answer 1

$3000 is the answer.

The total profit the company earns after selling 100 boards is $3000.

Further Explanation:

Total profit:

Total profit refers to the amount subtracted by the total cost of the firm from the total revenue of the firm. Total profit is the excess of the total cost from the total revenue.  

The formula for computing total profit:

Total Profit = Total Revenue – Total Cost

Step 1:

The total cost of making one skateboard = Expense for the wheels + Expense for the                      

                                                    plastic board + Expense for the paint + Expense for the  

                                                                  labor

                                                                  = $3 + $1 + $1 + $10

                                                                  = $15

Step 2:

The total cost of making 100 skateboards = Total cost of making one skateboard × 100  

                                                                   skateboards

                                                                = $15 × 100

                                                                = $1,500

Therefore, Total Cost is $1,500.

Step 3:

Total Revenue = Cost of selling one skateboard × 100 skateboards

                         = $45 × 100

                         = $4,500

Therefore, Total Revenue is $4,500

Step 4:

Total Profit = Total Revenue - Total Cost

                    = $4,500 - $1,500

                    = $3,000

Thus, the total profit the company earns after selling 100 skateboards is $3000.

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Answer Details:

Grade: High School

Chapter: Total profit

Subject: Accountancy

Keywords: Brenda’s Board manufactures skateboards. Each skateboard sells for $45 and includes the following expenses: $3 for the wheels and mounts, $1 for the plastic board, $1 for the paint, and $10 for the labor. What is the total profit the company earns after selling 100 boards, $3000.

Answer 2

The total profit that Brenda's Board company earns after selling 100 skateboards is $3000 .

The formula for profit = Revenue - Production cost

Further explanation

Many terms that we usually use in the business or accounting including:

1. Revenue is the income that business made, usually from selling products or services to customers.

2. Production cost is the total expenses used for manufacturing, this cost includes raw material, overhead, and labor  

3. Profit is the amount that earns after the total cost of producing goods or offering services deducted from its revenue.  

From the case above, we know that Brenda’s Boards sells the skateboard for $45 each.

The total cost for making one skateboard is $15, this cost by adding up all the production cost or the expenses

= The wheels and mounts + plastic board + paint + labor = $3+ $1 + $1 + $10 = $15

Using the formula and the information above we can calculate the profit for 100 skateboards:  

Total revenue = $45 x 100 = $ 4500

Total cost = 100 x $15 = $1500

Profit = Revenue - Production cost (expenses) = $4500 - $1500 = $3000

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Keywords: business profit, revenue, production cost, business expenses