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The cost accounting records of Alanwar Company shows the following: Total manufacturing costs $ 750
The cost accounting records of Alanwar Company shows the following: Total manufacturing costs $ 750.000 Total units produced 15.000 units Total units sold 14.500 units Selling price $ 85 per unit Beginning balance of Finished Goods O units What is the operating profile Select one: O a $1.475.000 O b. $ 2.507 500 O c. $750,000 O d. 5 507 500
Expert Solution
Total units sold = 14,500
Selling price per unit = $85
Sales revenue = Total units sold x Selling price per unit
= 14,500 x 85
= $1,232,500
Total manufacturing cost = $750,000
Number of units produced = 15,000
Number of units sold = 14,500
ending inventory units = Number of units produced- Number of units sold =
= 15,000-14,500
= 500
Cost of ending inventory = Total manufacturing cost x Ending inventory / Number of units produced
= 750,000 x 500/15,000
= $25,000
Cost of goods sold = Total manufacturing cost - Cost of ending inventory
= 750,000-25,000
= $725,000
Operating profit = Sales revenue- Cost of goods sold
= 1,232,500-725,000
= $507,500
Correct option is d
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