Question

mrs. merton has decided to set up a pie making business. to set herself up in business she must purchase equipment totalling $200, plus each pie that she makes costs her 25 cents. she is planning to sell her pies for $1.50 each. if she manages to sell 500 pies, what is her total profit? provide your answer below:

Explanation:

Step1: Calculate total cost

The fixed - cost of equipment is $200$. The variable cost for 500 pies at $0.25$ per pie is $0.25\times500 = 125$. So the total cost $C=200 + 125=325$.

Step2: Calculate total revenue

She sells 500 pies at $1.50$ per pie. So the total revenue $R = 1.50\times500=750$.

Step3: Calculate profit

Profit $P=R - C$. Substitute $R = 750$ and $C = 325$ into the formula, we get $P=750-325 = 475$.

Answer:

$475$