Answer: $2000
Explanation:
From the question, we are informed that Ranger Corporation is currently selling widgets for $40 at a cost of $20 per unit and that the fixed costs are currently $500 and the current production is 100 widgets.
The Operating Cash Flow at this output level will be:
= (P - V) × Q
where p = selling price = $40
v = cost price = $20
q = quantity = 100
= ($40 - $20) × 100
= $20 × 100
= $2000
