A company produces gadgets with a production cost of $25 per unit and sells them for $40 each. If they sell 1000 units, calculate the profit.

Sun, 19 Apr 2026 00:28:11 +0000

A company produces gadgets with a production cost of $25 per unit and sells them for $40 each. When selling 1,000 units, the financial outcome is clear and memorable: total revenue reaches $40,000, while total production costs amount to $25,000, generating a profit of $15,000. This straightforward calculation—profit equals revenue minus cost—resonates strongly in today’s market, where consumers and businesses alike track margins with precision. With rising interest in transparent, efficient manufacturing, this basic yet revealing model exemplifies a sustainable pricing strategy gaining attention across tech, retail, and small business sectors in the U.S. The growing spotlight on unit economics reflects broader trends: buyers increasingly value clarity in product pricing and profit margins. In an era defined by economic awareness and financial literacy, the $25-to-$40 gadget model stands out not for flashy claims, but for its honest demonstration of cost-driven success. It’s not a niche outliers—it’s a relatable blueprint for smart commercial operations, aligning with sustainable growth narratives emphasized on digital platforms and trade forums. How exactly does this pricing strategy work? The formula is simple: revenue multiplies the unit selling price ($40 × 1,000), while total costs multiply the unit cost ($25 × 1,000), resulting in a net profit margin of $15 per gadget. Selling 1,000 units means every dollar spent to produce a gadget contributes directly to profit, making this business model efficient and scalable. This margin reflects disciplined cost management and strong pricing strategy—key drivers of retention and investor confidence in competitive consumer markets. Common questions arise around this model. How is profit calculated step-by-step? First, total revenue is determined by multiplying the unit price by quantity sold. Next, total cost is computed by multiplying the unit cost by quantity. Subtracting the latter from the former highlights the net gain. This calculation is not only academically sound but also a cornerstone of financial planning, regularly used by startups, distributors, and retailers alike. In an age where digital tools simplify math, this reliable method becomes a trusted reference point.