Final answer:
To find Heineken's gross profit for May, we calculated the average cost of inventory, determined the cost of goods sold, and then subtracted it from the total revenue. The closest gross profit is approximately $6,750 option a.
Step-by-step explanation:
First, we need to calculate the average cost per unit of inventory. To find the average cost, we combine the beginning inventory with purchases and divide by the total units available.
Beginning inventory: 300 units at $7 each = $2,100
Purchases: 600 units at $7 each + 790 units at $8 each = $4,200 + $6,320 = $10,520
Total cost of inventory: $2,100 (beginning) + $10,520 (purchases) = $12,620
Total available units: 300 (beginning) + 600 + 790 = 1,690 units
The average cost per unit = Total cost of inventory / Total available units = $12,620 / 1,690 units = $7.468 per unit
Next, to find the cost of goods sold (COGS), we multiply the average cost per unit by the number of units sold during the month.
COGS: 1,500 units sold × $7.468 average cost per unit = $11,202
Now, we calculate the total revenue from the sold units.
Total revenue: 1,500 units sold × $12 per unit = $18,000
Finally, to find the gross profit, we subtract COGS from Total Revenue.
Gross Profit: Total Revenue - COGS = $18,000 - $11,202 = $6,798
The answer is closest to option A, so Heineken's gross profit for the month of May is $6,750.