Question

If one unit of Product Z2 used $3.30 of direct materials and $3.80 of direct labor, sold for $12.00, and was assigned overhead at the rate of 38% of direct labor costs, how much gross profit was realized from this sale? (Round your intermediate calculations and final answer to two decimal places.)

Answer 1

Gross Profit = Sales - Cost of Goods SOld

A	Direct Material	$               3.30
B	Direct Labor cost	$               3.80
C = B x 38%	Overheads	$               1.44
D = A+B+C	Total Cost of goods sold	$               8.54
E	Sold for	$            12.00
F = E - D	Gross Profit realized	$               3.46