Answer:
Gross profit= $814,300
Explanation:
Giving the following information:
Selling price per unit $8.20
Variable manufacturing costs per unit $1.84
Fixed manufacturing overhead (in total) $80,000
Units produced during the year 510,000
Units sold during year 170,000
<u>Under the absorption costing method, the unitary product cost is calculated using the variable manufacturing cost and the unitary fixed manufacturing overhead.</u>
<u>The gross profit is the result of deducting from sales the cost of goods sold</u>.
First, we need to calculate the unitary total cost:
Unitary cost= 1.84 + (80,000/510,000 units)= $3.41
Now, we can calculate the gross profit:
Gross profit= 170,000*8.2 - 170,000*3.41= $814,300
