Question

Suppose Kitchen HelpersKitchen Helpers manufactures cast iron skillets. One model is a​ 10-inch skillet that sells for $36. Kitchen HelpersKitchen Helpers projects sales of 550 ​10-inch skillets per month. The production costs are $8 per skillet for direct​ materials, $3 per skillet for direct​ labor, and $5 per skillet for manufacturing overhead. Kitchen Helpers has 45 ​10-inch skillets in inventory at the beginning of July but wants to have an ending inventory equal to 40​% of the next​ month's sales. Selling and administrative expenses for this product line are $1,800 per month. Kitchen HelpersKitchen Helpers has budgeted cost of goods sold of $8,800 for July. Compute the budgeted gross profit for July.

Answer 1

The budgeted gross profit for July is $ 11,000.

Step-by-step explanation:

total cost of goods sold per july = $8,800

total units sales = $ 550

cost of goods sold for unit = $16

budgeted sale per unit is = $36

budgeted gross profit for unit = selling price - cost of goods sold

= $36 - $16

= $20

total budgeted gross profit for july

= total units sales in july *gross profit per unit

= 550*$20

= $ 11,000

Therefore, The budgeted gross profit for July is $ 11,000.