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kit question

Forums › FIA Forums › MA2 Managing Costs and Finance Forums › kit question

  • This topic has 3 replies, 2 voices, and was last updated 6 years ago by Ken Garrett.
Viewing 4 posts - 1 through 4 (of 4 total)
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  • November 1, 2016 at 7:19 pm #347018
    rasel9045
    Member
    • Topics: 19
    • Replies: 17
    • ☆

    A company had total revenue of $169000 in a period from the sale of 6,500 units of its single product.There was no finished goods inventory at the beginning of the period and 200 units were in inventory at the end of the period.Production costs in the period were:Variable costs $93130,fixed costs $41540….Fixed costs are absorbed on an actual basis using units produced.What was the gross profit in the period?..please do the math for me.

    November 2, 2016 at 8:24 pm #347139
    Ken Garrett
    Keymaster
    • Topics: 10
    • Replies: 10221
    • ☆☆☆☆☆

    Does the kit answer not explain the answer?

    November 3, 2016 at 3:04 pm #347227
    rasel9045
    Member
    • Topics: 19
    • Replies: 17
    • ☆

    No.That’s why asked you.It did the math only.But did not explain how?

    November 4, 2016 at 3:23 pm #347421
    Ken Garrett
    Keymaster
    • Topics: 10
    • Replies: 10221
    • ☆☆☆☆☆

    6,700 units made (6,500 + 200)

    TAC per unit = (93,130 + 41,540)/6,700 = 20.1

    Cost of sales = 20.1 x 6,500 = 130,650

    GP = 169,000 – 130,650 = 38,350

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