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Variable cost ratio is 60% of Sales. Fixed Cost is $ 10000. Sales $ 40000. How much the profit ?

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Question added by VENKITARAMAN KRISHNA MOORTHY VRINDAVAN , Project Execution Manager & Accounts Manager , ALI INTERNATIONAL TRADING EST.
Date Posted: 2015/02/07
Lesley Lanag CMA CPA
by Lesley Lanag CMA CPA , Senior Accountant , Takaful Emarat Insurance (P.S.C)

D.6000

Sales - Variable costs - fixed Costs

40,000 - (60% *40000) -10000

Mir Mujtaba Ali
by Mir Mujtaba Ali , Internal Audit Manager , Confidential

 

Sales  =  Variable expenses + Fixed expenses + Profits

D. $6,000

Ahmed kandil
by Ahmed kandil , Cost Controller , Battour Holding Cpompany

contribution margin is40% of sales 

CM =40000*.4=16000

FIXED  COST IS10000 

THUS PROFIT IS ==6000

THUS ANSWER IS D 

 

Malik Khalid Mahmood
by Malik Khalid Mahmood , Regional Finance Manager , Leosons International FZ LLC

D -6000  ..........................................

Abd ElRahman Mohammed Idris Mohammed
by Abd ElRahman Mohammed Idris Mohammed , Internal Audit Manager , Kenana Sugar Company Limited

(D) is correct.

Sales                                                    $40000

Variable cost                                    (  $24000)

Fixed cost                                           ( $10000)

Profit                                                       $6000

Syed Abdullah Munawwar ACA FCCA
by Syed Abdullah Munawwar ACA FCCA , Financial Analyst , Pakistan Petroleum Limited

Sales          40000

less:V.C    24000 -60% of40000

less:F.C    10000

Profit          6000

Mohammed  Mohammed
by Mohammed Mohammed , Senior SAP Consultant , Abyat Mega Store

40000- (40000*.6+10000)=6000

D ............correct

sales                                                      $40,000

variable cost (60%*$40,000)           ($24000)

Fixed cost                                             ($10,000)

Profit                                                       $6,000  

Ahmed Abd Alwahab Awad Ibrahim
by Ahmed Abd Alwahab Awad Ibrahim , Chief Accounting , ICCDP

Net Profit =Sales - Variable Cost - Fixed Cost

Net Profit =40000-(40000X60%)-10000

Net Profit =-10000 =6000

so the answer is

 

D. $6000

Waqas Raza Khan
by Waqas Raza Khan , Accountant , Cold Store Group of Saudi Arabia

Well explained by All. Option D is correct -6000

D. $6000..........................................................

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