Riverside Manufacturing provided the following information for the month ended March 31: $$\begin{array} { | l | r | }
\hline \text { Sales Revenue } & \$ 27,000 \
\hline \text { Beginning Finished Goods Inventory } & 14,000 \
\hline \text { Ending Finished Goods Inventory } & 10,500 \
\hline \text { Cost of Goods Manufactured } & 14,600 \
\hline
\end{array}$$ Compute gross profit.
A) $8,900
B) $12,400
C) $15,900
D) $1,900

Question

Riverside Manufacturing provided the following information for the month ended March 31: $$\begin{array} { | l | r | } 
\hline \text { Sales Revenue } & \$ 27,000 \
\hline \text { Beginning Finished Goods Inventory } & 14,000 \
\hline \text { Ending Finished Goods Inventory } & 10,500 \
\hline \text { Cost of Goods Manufactured } & 14,600 \
\hline
\end{array}$$ Compute gross profit.
A) $8,900
B) $12,400
C) $15,900
D) $1,900

Quizplus · Accepted Answer

Gross profit is calculated as Sales Revenue minus Cost of Goods Sold (COGS). COGS is calculated as Beginning Finished Goods Inventory + Cost of Goods Manufactured - Ending Finished Goods Inventory. Thus, COGS = $14,000 + $14,600 - $10,500 = $18,100. Gross profit = Sales Revenue - COGS = $27,000 - $18,100 = $8,900.

Riverside Manufacturing Provided the Following Information for the Month Ended