In 2008, Lake Would Recognize Realized Gross Profit Of

question 85

Multiple Choice

In 2008, Lake would recognize realized gross profit of:

• A)$150,000.
• B)$ 0.
• C)$300,000.
• D)$450,000.Gross profit % = ($900,000 $450,000)/$900,000 = 50% 2008: 50% $300,000 = $150,000

---

Definitions:

Fixed Costs

Costs that do not change with the volume of production or sales, such as rent, salaries, and insurance.

Reported Income

The income that a company officially reports on its income statement, which has been calculated according to the applicable accounting standards.

FIFO Method

The First-In, First-Out accounting method, where the first items added to inventory are the first ones to be sold or used.

Inventory Valuation

The method used to price inventory items on the balance sheet, impacting cost of goods sold and financial results.