Ships Ahoy Is a Small Company That Makes Model Sailboat

Ships Ahoy is a small company that makes model sailboat kits priced at $120 each. (There is no quantity discount.) The costs of the materials that go into each kit are $45. It costs $5 in labour to assemble a kit. The company has monthly expenses of $1,000 for rent and insurance, $200 for heat and electricity, $500 for advertising in sailing and hobby magazines, and $3,500 for the monthly salary of its owner. If Ships Ahoy sells 150 kits in a given month, its monthly profit will be:

A) $12,700.
B) $5,300.
C) $10,500.
D) $12,800.

Correct Answer:

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