Question

Based on the following data, what is the gross profit for the company?Sales$ 1,000,000Net purchases of raw materials 600,000Cost of goods manufactured 800,000Marketing and administrative expenses 250,000Indirect manufacturing costs 500,000

Answer 1

$600,000

Step-by-step explanation:

Sales = $ 1,000,000

Net purchases of raw materials = 600,000

Cost of goods manufactured = 800,000

Marketing and administrative expenses = 250,000

Indirect manufacturing costs = 500,000

Beginning inventory Ending inventory

Work in process = $500,000 $400,000

Finished goods = $100,000 $500,000

Cost of goods sold:

= Beginning finished goods inventory + Cost of goods manufactured - Ending finished goods inventory

= $100,000 + $800,000 - $500,000

= $400,000

Gross profit = Sales - Cost of goods sold

= $ 1,000,000 - $400,000

= $600,000