Question

A company manufactured 50,000 units of a product at a cost of $450,000. It sold 45,000 units at $15 each. The gross profit is a.$270,000 b.$240,000 c.$750,000 d.$600,000

Answer 1

Answer:

The answer is A. $270,000

Explanation:

Gross profit is a measure of profitability. It can be derived by deducting cost of sales(cost of goods sold) from the net sales or revenue i.e Net sales(revenue) minus cost of sales:

Sales or Revenue: 45,000 units at $15

45,000 x 15

=$675,000

Cost of sales:

45,000units = ($450,000 / 50,000 units) × 45,000 = $405,000

Therefore, gross profit is:

$675,000 - $405,000

=$270,000