You have a product it uses $2.50 of direct materials and $3 of direct labor and sold for $8 and...
Question:
You have a product it uses $2.50 of direct materials and $3 of direct labor and sold for $8 and was assigned overhead at a rate of 30% direct labor cost.
How much gross profit was realized on the sale?
Gross Profit:
Gross profit represents the sales revenue over the cost of goods sold. The cost of goods manufactured is adjusted for the beginning and ending finished goods inventory to determine the cost of goods sold.
Answer and Explanation: 1
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The gross profit realized on the sale was $1.60.
| Amount | |
| Selling price (A) | $8 |
| Manufacturing costs: | |
| Direct materials | $2.50 |
| Direct labor | $3 |
| Manufacturin... |
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