Extension activity A: Calculating profit Question 1 Marie sells doughnuts at school to earn extra pocket money. She buys the doughnuts from a local bakery for R3.50 each. At school she sells them for R5. Use the Equation Profit = Sales - Total Costs to work out how much profit she earns on each doughnut. Marie sells on average 25 doughnuts a day. What is her daily profit?

Daily profit from Marie's perspective is the excess of her daily revenue over her daily cost of buying doughnuts from the local bakery, bearing in mind that selling price per doughnut is R5 and cost per unit R3.50

We can first of all determine her daily revenue as the selling price per unit multiplied by the number of doughnuts bought

daily revenue=R5*25

daily revenue=R125

Also, total daily cost is the cost price per doughnut multiplied by the units bought

total cost=R3.50*25

total cost=R 87.5

Having determined the total revenue and total cost daily, we can proceed to computing daily profit as total revenue minus total cost

Profit = Sales - Total Costs

Profit=R125-R87.50

Profit=R 37.50

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