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TwinCo produces and sells two products.Product A sells for $8 and has variable expenses of $3.Product B sells for $18 and has variable expenses of $10.It predicts sales of 20,000 units of A and 10,000 units of B.Fixed expenses are $100,000 per month.Assume that TwinCo hits its sales goal for February of $600,000, and exceeds its expected before-tax profit of $70,000.What has happened?
I do not know where you found this question, but it does not really make any sense!
Since they had sales of $600,000 they obviously sold more than they predicted and/or sold at a higher price (although it is odd that their goal had not been based on what they predicted!)
Selling more, or selling at a higher price will obviously lead to a greater profit (as will cutting costs if that has happened).
The question says that the expected profit was $70,000. In fact on the information in the question, the expected profit was $80,000.The question really makes no sense at all.
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