Using the information below, calculate gross profit for the period: $\begin{array}{lc}
\text { Beginning Raw Materials Inventory } & \$ 25,000 \
\text { Ending Raw Materials Inventory } & 30,000 \
\text { Beginning Work in Process Inventory } & 55,000 \
\text { Ending Work in Process Inventory } & 64,000 \
\text { Beginning Finished Goods Inventory } & 80,000 \
\text { Ending Finished Goods Inventory } & 67,000 \
\text { Cost of Goods Sold for the period } & 540,000 \
\text { Sales revenues for the period } & 1,254,000\
\
\text { Operating expenses for the period}&232,000
\end{array}$
A) $1,022,000.
B) $727,000.
C) $714,000.
D) $482,000.
E) $187,000.

Question

Quizplus · Accepted Answer

Gross Profit = Net Sales - Cost of Goods Sold

First, we need to calculate the Cost of Goods Manufactured (COGM):

COGM = Beginning WIP Inventory + Total Manufacturing Costs - Ending WIP Inventory
COGM = $55,000 + ($25,000 + $540,000 - $30,000 - $64,000) = $526,000

Next, we can calculate Cost of Goods Sold (COGS):

COGS = COGM - Beginning Finished Goods Inventory + Ending Finished Goods Inventory
COGS = $526,000 - $80,000 + $67,000 = $513,000

Finally, we can calculate Gross Profit:

Gross Profit = Net Sales - COGS
Gross Profit = $1,125,400 - $513,000 = $712,400

Therefore, the best choice is C, $714,000.

Using the Information Below, Calculate Gross Profit for the Period