Question

Elenor Company sells 400 units of inventory for $40 each. The inventory originally cost Elenor $26 each. What is Elenor’s gross profit on this transaction?

Answer 1

Answer:

$5,600

Explanation:

Data provided in the question:

Number of units of inventory sold = 400 units

Selling cost of the inventory = $40 each

Original cost of the inventory = $26 each

Now,

Total inventory cost of the units sold = 400 × $26

= $10,400

Total selling cost of the inventory sold = 400 × $40

= $16,000

Therefore,

Elenor’s gross profit on this transaction

= Total selling cost of the inventory sold - Total inventory cost of the units sold

= $16,000 - $10,400

= $5,600