Question: A company is making a component that goes into electrical motors. The component has a variable cost of $10 per unit and the unit selling

A company is making a component that goes into electrical motors. The component has a variable cost of $10 per unit and the unit selling price is $24. The fixed cost is $20,000.

If the company uses a new technology, the unit variable cost will go up to $12 per unit, the unit selling price stays the same at $24, the demand for the product becomes 4000 units due to better quality, but the fixed cost will increase by $5000 to a total fixed cost of $25000. How much profit is made?

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