Profit from Revenue Minus Total Costs

Steps:

• Calculate total revenue: 4 units × $500/unit =$2000.
• Identify total variable cost for 4 units: $350.
• Compute total cost: fixed costs $1000 + variable cost$350 = $1350.
• Determine profit: total revenue $2000 - total cost$1350 = $650.

Why A is correct:

• Profit is total revenue minus total costs (fixed plus variable), per standard accounting formula.

Why the others are wrong:

• B: Equals fixed costs only, ignoring revenue and variable costs.
• C: Subtracts variable costs from revenue but omits fixed costs.
• D: Matches revenue alone, excluding all costs.

Final answer: A