Question

Tropic Zone Corporation experienced the following variances: materials price $260 U, materials quantity $1,260 F, labor price $590 F, labor quantity $370 F, and overhead $890 U. Sales revenue was $68,200, and cost of goods sold (at standard) was $38,200. Determine the actual gross profit.

Actual gross profit $

Answer 1

Answer Actual Gross Profit is $31070

Calculated as following

Calculation of Actual Cost of Goods sold
Cost of Goods Sold
	Standard Cost of Goods sold	$         38,200
Add:	materials price $260 U,	$               260
Less:	materials quantity $1,260 F,	$         (1,260)
Less:	labor price $590 F,	$             (590)
Less:	labor quantity $370 F,	$             (370)
Add:	overhead $890 U.	$               890
	Actual Cost of Goods sold	$         37,130
Calculation of Actual Gross profit
	Sale	$         68,200
Less:	Cost of Goods Sold	$       (37,130)
	Gross Profit	$         31,070

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