Question

Feed the Birds, Inc. is a merchandiser of premium bird seed. The company sells two products in 6 pound bags: Songbird and Wildbird. At the beginning of the day, the shop had 5 bags of Songbird and 15 bags of Wildbird in its inventory. During the day, the company purchased 5 additional bags of Songbird and 5 additional bags of Wildbird from its supplier. The bags were delivered to the shop during the day. At the end of the day, 3 bags of Songbird and 10 bags of Wildbird remained in inventory. Each bag of Songird costs $4 from the supplier, and each bag of Wildbird costs $2.50 from the supplier. In addition the company pays $1.50 in shipping and insurance on each bag of Songbird and Wildbird purchased from the supplier. These prices have not changed since the company began business. What is the company's Gross Profit for the day if it sells a bag of Songbird for $9.50 and a bag of Wildbird for $6.50? O A. $55.25 B. $37.00 OC. $75.50 OD. $53.00 O E. $32.50

Answer 1

Feed the Birds Inc.
Gross Profit Calculation for the Day
Particulars	Songbird	Wildbird	Total
Calculation of Inventory and Sales
Opening Stock-No of Bags	5.00	15.00
Add : Purchased during the day-no of bags	5.00	5.00
Less: Closing inventory of no of bags	(3.00)	(10.00)
Total Bags sold during the Day	7.00	10.00
Sales price per bag	$                  9.50	$                6.50
Sales Revenue	$                66.50	$              65.00	$             131.50
Cost per bag	$                  4.00	$                2.50
Cost of Bags	$                28.00	$              25.00	$               53.00
Shipping & Insurance on purchase @$1.5/bag	$                10.50	$              15.00	$               25.50
Total Cost of Bags sold	$                38.50	$              40.00	$               78.50
Gross Profit	28.00	25.00	$               53.00
So option D is correct.