Answer:
a. $74,222.50
b. $20,947.50
Step-by-step explanation:
The gross profit is the difference between the sales revenue and the cost of good sold. The gross profit percentage is the ratio of gross profit to net sales expressed as a percentage.
Net sales is the sales less returns and allowances. Similar to net sales is net purchases which is the gross purchase net the allowances and returns.
Given;
Type No. of Chairs Estimated Selling Price Each
Lounge chairs 1,040 $90
Armchairs 780 $80
Straight chairs 1,820 $50
Total 3,640
The total cost of
Lounge chairs = 1040/3640 * $29,925
= $8,550
Armchairs = 780/3640 * $29,925
= $6,412.50
Straight chairs = 1820/3640 * $29,925
= $14,962.5 0
During 2020, Splish sells 520 lounge chairs, 260 armchairs, and 312 straight chairs.
If the company sells sells 520 lounge chairs, 260 armchairs, and 312 straight chairs
cost of ;
Lounge chairs sold = 520/1040 * $8550
= $4275
armchairs sold = 260/780 * $6,412.50
= $2,137.5
straight chairs = 312/1820 * $14,962.5 0
= $2,565.00
Total cost of sales = $4275 + $2,137.5 + $2,565.00
= $8,977.50
Sales from
Lounge chairs sold = 520 * $90
= $46,800
armchairs sold = 260 * $80
= $20,800
straight chairs = 312 * $50
= $15,600
Total sales = $46,800 + $20,800 + $15,600
= $83,200.00
Gross profit = $83,200.00 - $8,977.50
= $74,222.50
Amount of inventory unsold = $29,925 - $8,977.50
= $20,947.50