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Zippy company manufactured 10,000 units in December with a total product cost of $27,357 They had zero finished goods inventory at the start of December. In December Zippy sold 7,811 units at a unit price of $6.16. Period expenses were $3,521. What is the amount of Zippy's gross profit (otherwise know as gross margin).? Round any intermediate calculations to four decimal places.

Respuesta :

Answer:

Gross profit is  $26,734.73

Explanation:

Cost per unit of production =$27,357/10,000

                                             =$2.73

Cost of goods sold= Opening stocks +production - closing stock

Cost of goods sold = 0 +$27,357- ( $2.73 *(10,000-7,811) )

                                = $ 21,381.03

Gross Profit = (  $6.16*7,811 ) -$ 21,381.03

                   = $26,734.73

Gross margin = $26,734.73/$48,115.76 *100%= 55.56%

This represents profit portion before removing operational expenses .

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