Lakeshore Manufacturing provided the following information for the month ended March 31: $\begin{array}{|l|c|}
\hline\text { Sales Revenue } & \$ 30,000 \
\hline \text { Beginning Finished Goods Inventory } & 17,000 \
\hline \text { Ending Finished Goods Inventory } & 11,500 \
\hline \text { Cost of Goods Manufactured } & 12,600\\hline
\end{array}$ Compute gross profit.
A)$11,900
B)$17,400
C)$22,900
D)$5900

Question

Quizplus · Accepted Answer

Gross profit is calculated as sales revenue minus cost of goods sold. Cost of goods sold is calculated as beginning finished goods inventory plus cost of goods manufactured minus ending finished goods inventory. Therefore, gross profit is $30,000 - ($17,000 + $12,600 - $11,500) = $11,900.

Lakeshore Manufacturing Provided the Following Information for the Month Ended