00:01
In this problem, it is given that frontier corporation has a fixed cost of dollar 300 ,000 and makes a profit of dollar 150 ,000.
00:20
And it is given that the sales is increased by 20 percentage.
00:26
We are asked to determine the increase in the profit.
00:29
Now we know that the profit denoted as p is the selling price denoted as sp minus the cost price cp.
00:40
So here corresponding to the profit of 150 ,000, the selling price is calculated by solving this equation.
00:52
150 ,000 is equal to selling price minus the cost price which is 300 ,000.
00:59
Therefore the selling price is 150 ,000 plus 300 ,000 which is $450 ,000.
01:13
Now it is given that the sales is increased by 20 percentage.
01:19
Therefore the new selling price is 450 ,000 plus 20 percentage of 400...