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In December 2008 question.1 I could not understand calculation of gross profit.
specially for second and third year where sales price is also reduce.
Can you please help me?The unit sales are as follows:
Year 1 – 18,000
Year 2 – 19800 (increase of 10%)
Year 3 – 21780 (increase of 10%)The selling prices per unit are:
Year 1 – $12
Year 2 – $12
Year 3 – $11.40 (decrease of 5%)The cost per unit are:
Year 1 – $7.20 (gross profit is 40% of selling price, so cost is 60%)
Year 2 – $7.20 (purchase price stays constant per the question)
Year 3 – $7.20So….the total gross profits are:
Year 1 – 18000 x (12 – 7.20) = 86400
Year 2 – 19800 x (12 – 7,20) = 95040
Year 3 – 21780 x (11.40 – 7.20) = 21780Hi,I did this question myself but I failed to calculate the GP for the last two years and I missed out the words “next four years” in the question so I start the year from 2005 to 2008 again….how many marks I will get?
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