The amount of profit earned during the year is Rs. 250,000. This is calculated by subtracting the total cost (which includes both fixed and variable costs) from the total revenue.
To find out the amount of profit earned during the year, we need to calculate the total revenue and total cost, and then subtract the total cost from the total revenue.
Given information:
Fixed cost = Rs. 500,000
Selling price per unit = Rs. 15
Variable cost per unit = Rs. 10
Output level = 150,000 units
Total revenue can be calculated by multiplying the selling price per unit by the output level:
Total revenue = Selling price per unit * Output level
Total revenue = Rs. 15 * 150,000
Total revenue = Rs. 2,250,000
Total variable cost can be calculated by multiplying the variable cost per unit by the output level:
Total variable cost = Variable cost per unit * Output level
Total variable cost = Rs. 10 * 150,000
Total variable cost = Rs. 1,500,000
Total cost can be calculated by adding the fixed cost and the total variable cost:
Total cost = Fixed cost + Total variable cost
Total cost = Rs. 500,000 + Rs. 1,500,000
Total cost = Rs. 2,000,000
Profit can be calculated by subtracting the total cost from the total revenue:
Profit = Total revenue - Total cost
Profit = Rs. 2,250,000 - Rs. 2,000,000
Profit = Rs. 250,000
Therefore, the amount of profit earned during the year is Rs. 250,000.
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