AMM, Inc., had sales of $43.0 million for fiscal 2010. The company\'s gross prof
ID: 2374128 • Letter: A
Question
AMM, Inc., had sales of $43.0 million for fiscal 2010. The company's gross profit ratio for that year was 24.0%.
(a)
Calculate the gross profit and cost of goods sold for AMM, Inc., for fiscal 2010. (Round your answers to 2 decimal places. Enter your answers in millions. Omit the "$" sign in your response.)
(b)
Assume that a new product is developed and that it will cost $489 to manufacture. Calculate the selling price that must be set for this new product if its gross profit ratio is to be the same as the average achieved for all products for fiscal 2010. (Round your answer to 2 decimal places. Omit the "$" sign in your response.)
Assume that the ending inventory of a merchandising firm is overstated by $27,800.
(a)
By how much and in what direction (overstated or understated) will the firm's cost of goods sold be misstated? (Omit the "$" sign in your response.)
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AMM, Inc., had sales of $43.0 million for fiscal 2010. The company's gross profit ratio for that year was 24.0%.
(a)
Calculate the gross profit and cost of goods sold for AMM, Inc., for fiscal 2010. (Round your answers to 2 decimal places. Enter your answers in millions. Omit the "$" sign in your response.)
(b)
Assume that a new product is developed and that it will cost $489 to manufacture. Calculate the selling price that must be set for this new product if its gross profit ratio is to be the same as the average achieved for all products for fiscal 2010. (Round your answer to 2 decimal places. Omit the "$" sign in your response.)
Assume that the ending inventory of a merchandising firm is overstated by $27,800.
Explanation / Answer
a) gross profit = 43 * 24% = $10.32 million
cost of goods sold = 43-10.32 = $ 32.68 million
b) selling price = 489 * 1/0.76= $ 643.42
c) cost of good sold are understated by $27800
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