Question

Pederson Company reported the​ following: Manufacturing costs $ 2,800 Units manufactured 56,000 Units sold 44,000 units sold for $ 75 per unit Beginning inventory 0 units What is the amount of gross profit​ margin?

Answer 1

Gross Profit Margin = 3297800

Step-by-step explanation:

given data

Manufacturing costs = $2,800

Units manufactured = 56,000

Units sold = 44,000

Sale Price = $75 per unit

Beginning inventory = 0 units

solution

we get here first Manufacturing Cost per unit that is

Manufacturing Cost per unit = Manufacturing Cost ÷ Units Manufactured ....1

Manufacturing Cost per unit =
`(2800)/(56000)`

Manufacturing Cost per unit = $0.05

and Closing Stock will be

Closing Stock = Units Manufactured - unit sold ........2

Closing Stock = 56,000 - 44,000

Closing Stock = 12000 units

and

Closing Stock Value will be as

Closing Stock Value = Closing Stock × Manufacturing Cost per unit .........3

Closing Stock Value = 12000 × $0.05

Closing Stock Value = $600

and Sale Value will be

sale value = Units Sold × Sale Price per unit ............4

sale value = 44,000 × $75

sale value = $3300000

so Gross Profit Margin will be as

Gross Profit Margin = Sale Value + closing Stock value - Manufacturing cost - opening stock value ...................5

Gross Profit Margin = $3300000 + $600 - $2,800 - 0

Gross Profit Margin = 3297800