Question

In 2010, the BowWow Company purchased 11,285 units from its supplier at a cost of $14 per unit. BowWow sold 14,204units of its product in 2010 at a price of $24 per unit. BowWow began 2010 with $778,732 in inventory (inventory is carried at a cost of $14 per unit). Using this information, compute BowWow's gross profit for 2010.

PLEASE SHOW ALL STEPS!!!

Answer 1

Gross Profit for the year 2010

Gross Profit = Sales – Cost of goods sold

Sales = Number of units sold x Selling price per unit

= 14,204 Units x $24 per unit

= $340,896

Cost of goods sold = Number of units sold x Cost per unit

= 14,204 Units x $14 per unit

= $198,856

Therefore, The Gross Profit = Sales – Cost of goods sold

= $340,896 - $198,856

= $142,040

“Hence, the Gross Profit for the year 2010 would be $142,040”