If one unit of Product X used $.75 of direct materials and $6.00 of direct labor,sold for $12.00,and was assigned overhead at the rate of 20% of direct labor costs,how much gross profit was realized from this sale?
A) $12.00
B) $6.75
C) $.75
D) $1.20
E) $4.05

Question

Quizplus · Accepted Answer

Cost of goods sold = DM + DL + OH
= $.75 + $6.00 + .2($6.00)
= $7.95
Gross profit = Sales - cost of goods sold
= $12.00 - $7.95 = $4.05

If One Unit of Product X Used