Question

In: Accounting

On June 1, Haimes Company spent $200,000 to purchase 250,000 coffee mugs to sell at its...

On June 1, Haimes Company spent $200,000 to purchase 250,000 coffee
mugs to sell at its retail store. During the year, Haimes Company
recorded the following sales of coffee mugs:

         Month          Mugs solds        Selling price per mug
         June             16,000                  $2.00
         July             35,000                  $2.50
         August            2,000                  $3.00
         September        31,000                  $2.00
         October          46,000                  $3.00
         November         47,000                  $4.00
         December         40,000                  $3.50

Calculate the gross profit earned by Haimes Company for the months
August through November.

Solutions

Expert Solution

August September October November
Mugs Sold 2000 31000 46000 47000
Selling Price per mug $                 3.00 $                   2.00 $              3.00 $               4.00
Sales $          6,000.00 $         62,000.00 $ 1,38,000.00 $ 1,88,000.00
Less: Cost of goods sold (Purchase price per mug * Mugs sold ) $          1,600.00 $         24,800.00 $    36,800.00 $     37,600.00
Gross Profit $         4,400.00 $         37,200.00 $1,01,200.00 $ 1,50,400.00
Purchase price per mug = $200,000/250,000 = $0.80 per mug

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