Question

______ On August 5, 2021, Famous Furniture shipped 20 dining sets on consignment to Furniture Outlet, Inc. The cost of each dining set was $350 each. The cost of shipping the dining sets amounted to $1,800 and was paid for by Famous Furniture. On December 30, 2021, the consignee reported the sale of 15 dining sets at $850 each. The consignee remitted payment for the amount due after deducting a 6% commission, advertising expense of $300, and installation and setup costs of $390. The total profit on units sold for the consignor is

a. $11,295

b. $4,695

c. $6,045

d. $9,945

Answer #1

Number of units consigned = 20

Cost per unit = $350

Shipping charges = $1,800

Total cost of units consigned = Number of units consigned x Cost
per unit + Shipping charges

= 20 x 350 + 1,800

= 7,000 + 1,800

= $8,800

Number of units sold by consignee = 15

Cost of goods sold by consignee = Total cost of units consigned x
Number of units sold by consignee/Number of units consigned

= 8,800 x 15/20

= $6,600

Inventory value of the units unsold = Total cost of units consigned
- Cost of goods sold by consignee

= 8,800 – 6,600

= $2,200

Sales revenue (15 x 850) | 12,750 |

Cost of goods sold | -6,600 |

Consignee's commission (12,750 x 6%) | -765 |

Advertising | -300 |

Installation cost | -390 |

Profit | $4,695 |

The total profit on units sold for the consignor is $4,695.

Correct option is b.

On August 5, 2018, Famous Furniture shipped 40 dining sets on
consignment to Furniture Outlet, Inc. The cost of each dining set
was $360 each. The cost of shipping the dining sets amounted to
$3,600 and was paid for by Famous Furniture. On December 30, 2018,
the consignee reported the sale of 30 dining sets at $850 each. The
consignee remitted payment for the amount due after deducting a 6%
commission, advertising expense of $600, and installation and setup
costs...

1) On May 3, 2014, Eisler Company consigned 100 freezers,
costing $700 each, to Remmers Company. The cost of shipping the
freezers amounted to $800 and was paid by Eisler Company. On
December 30, 2014, a report was received from the consignee,
indicating that 50 freezers had been sold for $900 each. Remittance
was made by the consignee for the amount due after deducting a
commission of 8%, advertising of $250, and total installation costs
of $300 on the freezers...

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