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During 20x1, Advanced Systems Introduced Complex Oil Well Monitoring Equipment

Question 143

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During 20x1, Advanced Systems introduced complex oil well monitoring equipment and produced 100 units in anticipation of selling to the major oil-producing companies. The first unit produced cost $125,000, and production costs are subject to a 90% learning curve. Note: ln(90%)/ ln(2)= -0.152.
During 20x1, the company sold 20 units and during 20x2, the company sold 40 units. Each unit sells for $100,000. If costs are assigned to cost of goods sold based on the average expected cost for all units in the 2001 production run, what is the company's gross profit during 20x2?

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