Assume a Firm Is Developing, Manufacturing, and Selling a Basic

Multiple Choice

Assume a firm is developing, manufacturing, and selling a basic software package at $500 per copy. Raw materials and direct labor total $200 per copy. Fixed costs are $250,000. If the firm sells 5,000 units per year, what will be the operating profit?

A) $1,250,000
B) $1,500,000
C) $2,250,000
D) $2,500,000