Net Sales for the Year Were $325,000 and Cost of Goods

question 24

Multiple Choice

Net sales for the year were $325,000 and cost of goods sold was $240,500 for the company's existing products.A new product is presently under development and has an expected selling price of $40 per unit in order to remain competitive with similar products in the marketplace. The dollar amount of gross profit and the gross profit ratio for the year were:

• A)$84,500 and 26%, respectively.
• B)$83,500 and 74%, respectively.
• C)$240,500 and 74%, respectively.
• D)$324,000 and 100%, respectively.

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Definitions:

Cost of Goods Sold

The specific costs associated with creating a company's products for sale, including the cost of materials and labor.

Manufacturing Overhead Applied

The allocation of all manufacturing costs, except for direct labor and direct materials, to goods produced.

Job Cost Sheet

A document used to record and track the costs associated with a specific job or project, detailing materials, labor, and overhead expenses.

Finished Goods

Items that have gone through the entire manufacturing phase and are prepared for retail.