A firm produces 4 units of a product each week - Leaving Cert Economics - Question 1 - 2006
Question 1
A firm produces 4 units of a product each week. It receives €2,000 in total from the sale of these four units. The firm pays the following costs when producing these... show full transcript
Worked Solution & Example Answer:A firm produces 4 units of a product each week - Leaving Cert Economics - Question 1 - 2006
Step 1
Fixed Costs and Variable Costs
96%
114 rated
Only available for registered users.
Sign up now to view full answer, or log in if you already have an account!
Answer
Rent of Buildings
Insurance on Buildings
Raw Materials
Wages
Step 2
Calculate the TOTAL COST of producing all 4 units
99%
104 rated
Only available for registered users.
Sign up now to view full answer, or log in if you already have an account!
Answer
To calculate the total cost, we need to sum up all costs incurred:
Total Cost = Raw Materials + Rent of Buildings + Wages + Insurance on Buildings
Total Cost = €500 + €400 + €400 + €200
Total Cost = €1500
Step 3
Calculate the PROFIT made on sales
96%
101 rated
Only available for registered users.
Sign up now to view full answer, or log in if you already have an account!
Answer
To calculate profit, we subtract the total cost from the total revenue:
Profit = Total Revenue - Total Costs
Profit = €2000 - €1500
Profit = €500
Join the Leaving Cert students using SimpleStudy...
