Turner Corp acquired two inventory items at lump-sum cost of 100,000

Marketing Dec 20, 2020

Turner Corp acquired two inventory items at lump-sum cost of 100,000. The acquisition included 3,000 units of product LF, and 7,000 units of product 1B. LF normally sells for $30 per unit, an 1B for $10 per unit. If Turner sells 1,000 units of LF, what amount of gross profit should it recognize?

Expert Solution

Total Cost	100,000
Ratio of Product LF	3/10
Cost of LF	30,000
Units	3,000
Unit Cost of LF	10
Units Sold	1,000
Total Cost of Units Sold	10,000

Units	1,000
Selling Price	30
Sales	30,000
Cost of Goods Sold	10,000
Gross Profit	20,000

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