A company manufactured 50,000 units of a product at a cost of $450,000. It sold 45,000 units at $15 each. The gross profit is
A) $750,000
B) $240,000
C) $600,000
D) $270,000

Question

Quizplus · Accepted Answer

To find the gross profit, we need to subtract the cost of goods sold (COGS) from the total revenue.

COGS can be calculated as:

COGS = Total manufacturing cost / Number of units manufactured

COGS = 450,000 / 50,000
COGS = $9 per unit

Total revenue = Number of units sold x Selling price per unit
Total revenue = 45,000 x $15
Total revenue = $675,000

Therefore, Gross profit = Total revenue - COGS
Gross profit = $675,000 - (45,000 x $9)
Gross profit = $270,000

Hence, the answer is D.

A Company Manufactured 50,000 Units of a Product at a Cost