AMA PCM Exam - Topic 4 Question 117 Discussion

Actual exam question for AMA's PCM exam

Question #: 117
Topic #: 4

[All PCM Questions]

A firm sells 20,000 units of a particular product at a price of $50 per unit. The company spends $30 per unit in raw materials and labor charges. What are company's fixed costs if it made a profit of $100,000?

A$100,000

B$200,000

C$300,000

D$400,000

E$500,000

Show Suggested Answer

Suggested Answer: C

by Felice at Oct 16, 2025, 07:01 PM

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Lashawna

15 hours ago

Total revenue is $1,000,000. Then subtract variable costs.

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Jesusita

6 days ago

If profit is $100,000, we need to find total revenue first.

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Tandra

11 days ago

I feel like the fixed costs are key here.

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Malcolm

16 days ago

Wait, how can fixed costs be that high?

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Beckie

21 days ago

I think fixed costs are $300,000.

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Refugia

26 days ago

Total revenue is $1,000,000.

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Jose

1 month ago

I don't know, but I'm pretty sure the answer involves a calculator and some serious number crunching. Maybe I should have paid more attention in my accounting class.

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Micaela

1 month ago

Hmm, this question is making my head spin. I'll just go with the classic B) $200,000 and hope for the best.

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Louis

1 month ago

E) $500,000 has to be the correct answer. That's the only way the numbers would work out.

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Rebbecca

2 months ago

D) $400,000 seems like the right answer to me. The fixed costs must be high for a company that size.

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Hannah

2 months ago

I'm pretty sure the answer is C) $300,000. That's the only way the company could have made a $100,000 profit.

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Justine

2 months ago

I think I got this. The key is recognizing that profit = total revenue - total costs. So if we know the profit is $100,000, and we can calculate the total revenue and variable costs, then the fixed costs must be whatever's left over.

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Nohemi

2 months ago

They sold 20,000 units at $50 each.

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Marci

2 months ago

This question is tricky! I think I need to calculate carefully.

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Kizzy

2 months ago

The answer is B) $200,000. This is the only option that makes sense given the information provided.

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Jutta

3 months ago

Totally agree, $300,000 makes sense!

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Sherell

3 months ago

This seems pretty straightforward to me. We just need to rearrange the profit equation to solve for the fixed costs. Total revenue minus total variable costs equals profit, so fixed costs must be the remaining amount.

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Gwenn

3 months ago

Wait, I'm a little confused. How do we know the fixed costs if we're just given the profit? Shouldn't we need to know the total costs to figure that out?

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Yuette

4 months ago

Okay, I think I can do this. Let me break it down step-by-step: total revenue is 20,000 units x $50 per unit, and total variable costs are 20,000 units x $30 per unit. Then I just need to subtract the variable costs from the revenue and set that equal to the $100,000 profit.

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Providencia

4 months ago

Hmm, this looks like a straightforward profit calculation problem. I'll need to find the total revenue and total variable costs, then subtract to get the fixed costs.

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Nobuko

3 months ago

So, fixed costs must be $400,000.

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Gail

4 months ago

I feel like the answer might be $200,000, but I’m not entirely confident. I need to double-check my calculations!

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Gail

4 months ago

I practiced a similar question where we had to find fixed costs based on profit and variable costs. I think it involves subtracting total variable costs from total revenue.

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Sylvia

4 months ago

If I remember correctly, fixed costs can be found by rearranging the profit formula, but I can't recall the exact steps.

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Tanja

5 months ago

I think we need to calculate total revenue first, which is 20,000 units times $50, but I'm not sure how to relate that to fixed costs.

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