Answer:
b.$9,000
Explanation:
Gross profit can be calculated by the entity using the below formula:
Gross profit:Sales- Cost of sales
In this question sales and cost of sales can be calculated as follows:
Sales=Number of units of LF sold by Turner Corporation*sales price
=1,000*24=$24,000
Since the entity is selling LF for 24$ which is 3 times the price at which it is selling 1B and assuming that the Turner Corporation is earning same gross profit percentage on both products, then cost of sales can be determined as follows:
Let say cost of 1B is "x" then the cost of LF will be "3x",applying the above to cost of sales for LF can be determined as :
3,000(3x)+7,000(x)=80,000
9000x+7000x=80,000
16,000x=80,000
x=5(80,000/16,000)
Cost for one unit of LF=3*5=15
Cost of sales for 1,000 units=15*1000=15,000
Gross profit=24,000-15,000=$9,000
Answer is b.$9,000
