The following information pertains to Max Corporation: $$\begin{array} { l r }
\text { Beginuning work-in-process inventory } & \$ 20,000 \
\text { Ending work-int-process inventory } & 23,000 \
\text { Beginuning finished goods inventory } & 36,000 \
\text { Ending finished goods inventory } & 34,000 \
\text { Cost of goods manufactured } & 246,000 \
\text { Sales } & 300,000
\end{array}$$ What is the gross profit margin earned by the company?
A) $52,000
B) $50,000
C) $48,500
D) $53,500

Question

The following information pertains to Max Corporation: $$\begin{array} { l r } 
\text { Beginuning work-in-process inventory } & \$ 20,000 \
\text { Ending work-int-process inventory } & 23,000 \
\text { Beginuning finished goods inventory } & 36,000 \
\text { Ending finished goods inventory } & 34,000 \
\text { Cost of goods manufactured } & 246,000 \
\text { Sales } & 300,000
\end{array}$$ What is the gross profit margin earned by the company?
A) $52,000
B) $50,000
C) $48,500
D) $53,500

Quizplus · Accepted Answer

Gross profit is calculated as Sales minus Cost of Goods Sold (COGS). COGS is calculated as: Beginning Finished Goods Inventory + Cost of Goods Manufactured - Ending Finished Goods Inventory = $36,000 + $246,000 - $34,000 = $248,000. Gross Profit = Sales - COGS = $300,000 - $248,000 = $52,000.

The Following Information Pertains to Max Corporation What Is the Gross Profit Margin Earned by the Company