A company was the victim of several frauds that totaled approximately $10 million in one year. With a profit margin of 10 percent, and assuming that the company's product sold for $1,000 per unit, how many additional units must the company sell to compensate for the fraud losses?
A) 1 million
B) 100 million
C) 100,000
D) 10,000

Question

Quizplus · Accepted Answer

To compensate for the $10 million loss at a 10% profit margin, the company needs to generate an additional $100 million in sales ($10 million / 0.10). Since each unit sells for $1,000, the company must sell an additional 100,000 units ($100 million / $1,000 per unit) to compensate for the fraud losses.

A Company Was the Victim of Several Frauds That Totaled