13 of 28 Classic Trains Ltd is a retailer of toy trains Duri

13 of 28 Classic Trains Ltd is a retailer of toy trains During the year they expect to sell 2,000 basic The basic trains cost $18 each and the \'colloctors\' odlton trains cost $41 each Delivery cost for both tyoes of train is $2 per tom Other costs are depreciation of $1,000 and wages of $4,000 ?ow much profit does Classic Trains Ltd expect to make for the year? trains for $40 each and 1,000 \'colectors\' odtion tas for

Solution

Answer : Net Profit = $47000 (as detailed under)

Classic Trains Ltd.
	Basic	Collectors	Total
Units sold	2000	1000
Unit price	40	55
Sales revenue	80000	55000	135000
Less:Cost	36000	41000	77000
Less: Delivery cost	4000	2000	6000
Product\'s contribution	40000	12000	52000
Less: other costs:
Depreciation			-1000
Wages			-4000
Profit			$47000