Question

If a business sells 100,000 magazines at £2.50 each and the variable costs are 80p and fixed
costs are £125,000, discuss whether the business should stop selling magazines.
(12 points)

Answer 1

Answer:

They shouldn't because they are making a net profit of £45,000

Explanation:

They make around £250,000 I got this by multiplying 100,000 by 2.50 and the cost to produce is 0.80, so 100,000x0.80 is 80,000 and the costs are 125,000. if we merge the total costs and subtract it by the total profit ; 80,000+125,000 we get 205000, 250,000-205000 we get 45,000.