Figure 6-7
Suppose That a Concrete Manufacturer Produces Four Grades

question 51

Multiple Choice

Figure 6-7
Suppose that a concrete manufacturer produces four grades of concrete totaling 500,000 cubic yards as follows at a joint cost of £2,000,000: $$\begin{array} { c c c } \text { Grade } & \text { Cubic Yards } & \text { Sales Value } \\\text { A } & 75,000 & £ 375,000 \\\text { B } & 200,000 & 1,200,000 \\\text { C } & 100,000 & 700,000 \\\text { D } & 125,000 & 850,000\end{array}$$
-Refer to Figure 6-7. What is the gross profit of Grade D if the constant gross margin percentage method is used?

• A)£306,000
• B)£1,125,000
• C)£544,000
• D)£900,000

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Definitions:

Issuing Company

The entity that offers its own securities like stocks or bonds for sale to investors to raise capital.

Earnings Per Share

A financial metric that calculates the portion of a company's profit allocated to each outstanding share of common stock, providing an indicator of the company's profitability.

Equity

The value of an owner’s interest in a property or a business, after deducting liabilities.

Expansion

A growth strategy where a business increases its scale of operations, typified by entering new markets, increasing product lines, or growing in size.