The table shows the estimated sales for two different prices of bags of chips.

Calculate the profit per bag for the bags sold at [tex]\$3[/tex] each.

\begin{tabular}{|r|c|r|r|r|r|}
\hline Sales Price & Estimated Sales & Fixed Cost & Fixed Cost per Unit & Variable Cost & Total Cost \\
\hline [tex]\$2.00[/tex] & [tex]2,000,000[/tex] bags & [tex]\$400,000[/tex] & [tex]\$0.20[/tex] & [tex]\$0.40[/tex] & [tex]\$0.60[/tex] \\
\hline [tex]\$3.00[/tex] & [tex]1,600,000[/tex] bags & [tex]\$400,000[/tex] & [tex]\[tex]$0.25[/tex] & [tex]\$[/tex]0.40[/tex] & [tex]\$0.65[/tex] \\
\hline
\end{tabular}

[tex]\$[?][/tex]



Answer :

To calculate the profit per bag for the bags sold at [tex]$3.00 each, we can follow these steps, based on the information given in the table. 1. Identify the sales price for each bag: \[ \text{Sales Price} = \$[/tex]3.00
\]

2. Identify the total cost per unit:
- Variable Cost per Bag: [tex]$\$[/tex]0.40[tex]$ - Fixed Cost per Bag: $[/tex]\[tex]$0.25$[/tex]
- Therefore, Total Cost per Bag: [tex]\(0.40 + 0.25 = \$0.65\)[/tex]

[tex]\[ \text{Total Cost} = \$0.65 \][/tex]

3. Calculate the profit per bag:
This is done by subtracting the total cost per bag from the sales price.

[tex]\[ \text{Profit per Bag} = \text{Sales Price} - \text{Total Cost} \][/tex]
Plugging in the values:

[tex]\[ \text{Profit per Bag} = 3.00 - 0.65 = \$2.35 \][/tex]

So, the profit per bag when sold at [tex]$3.00 each is $[/tex]2.35.