Billy’s bean bag emporium produced 300 bean bag chairs but sold only 275 of the units it produced. the average cost of production for each unit of output produced was $100. the price for each of the 275 units sold was $95. total profit for billy’s bean bag emporium would

Total profit is -$3,875

Explanation:

Total Profit = total revenue - total cost

Total cost here is the cost of producing all the bean bag chairs for sale, regardless of whether they are bought or not

Total cost = unit production cost * production quantity = 300 * 100 = $30,000

Total revenue = unit price * quantity of units sold = 275 * 95 = $26,125

Total Profit = $26,125 - $30,000 = -$3,875

Negative profit means the company made a loss. Part of the reason is that unit price is larger than production cost, which is unusual. Check that you got the correct information.

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