Homework Answers
in constant gross margin percentage method the overall gross profit ratio is calculated
use that gross profit margin ratio to allocate gross margin to product line and deduct it from sales to find out costs.
| paper | card | Total | |
| units sold | 120000[130000-10000] | 96000[108000-12000] | |
| sale per unit | 2.75 | 3.50 | |
| total sales | 330000 | 336000 | 666000 |
| less: joint cost | (144000) | ||
| less : separable cost | (488000) | ||
| Gross profit | 34000 | ||
Gross profit ratio = gross profit/sales*100
=34000/666000*100
=5.105105%
| sales | gross margin | gross profit | Total cost | separable cost | joint cost allocated | |
| paper | 330000 | 5.105105% | 16847 | 313153[330000-16847] | 224000 | 89153[313153-224000] |
| card | 336000 | 5.105105% | 17153 | 318847[336000-17153] | 264000 | 54847[318847-264000] |
income statment
| paper | card | |
| sales | 330000 | 336000 |
| less: | ||
| Allocated cost | 89153 | 54847 |
| separable cost | 224000 | 264000 |
| Gross profit | 16847 | 17153 |
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