Question

Which of the following is the correct formula for profit?

(Sales volume + Price) / (Variable costs * Fixed costs)
(Sales volume + Price) – (Variable costs Fixed costs)
0 (Sales volume * Price) / (Variable costs + Fixed costs)
(Sales volume * Price) – (Variable costs + Fixed costs)

Answer 1

(Sales volume * Price) – (Variable costs + Fixed costs)

Step-by-step explanation:

Profit is equal to Total sales less Total costs .

Here, Total costs is the addition of Variable and Fixed costs

(Sales Volume x Price) - (Variable Costs + Fixed Costs).