Question

Calculate the total revenue, total costs, and total gross profit the company will earn on the sale of L-Ten, Triol, and Pioze. Allocate the joint cost to L-Ten, Triol, and Pioze using the constant gross margin percentage method.

Answer 1

L-Ten, Triol and Pioze

Revenue $1,000,000 ; $2,000,000 ; $700,000

Total Costs $750,000 ; $750,000 ; $510,000

Gross Profits $250,000 ; $1,250,000 $190,000

Step-by-step explanation:

Gross Margin percentage = Gross margin / Revenue

Gross Margin Percentage = Total Gross Margin of all products / Total revenue

Gross Margin Percentage = $1,690,000 / $3,700,000 = 0.45

Gross margin percentage is 45%