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Tadfield Dairy Farm sells a crate of milk for $80. Variable costs are $20 per unit and fixed costs for the period are $6,000. If the break-even point is 100 crates, the profit on the 101st crate sold is: Group of answer choices $60 $0 $80 None of the other options $100

Question

Tadfield Dairy Farm sells a crate of milk for 80.Variablecostsare80. Variable costs are 20 per unit and fixed costs for the period are $6,000. If the break-even point is 100 crates, the profit on the 101st crate sold is:

Group of answer choices

$60

$0

$80

None of the other options

$100

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Solution

The profit on any unit sold is the selling price per unit minus the variable cost per unit.

In this case, the selling price per unit is 80andthevariablecostperunitis80 and the variable cost per unit is 20.

So, the profit on the 101st crate sold is 8080 - 20 = $60.

Therefore, the correct answer is $60.

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