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19 June, 06:35

Calamata Corporation processes a single material into three separate products A, B, and C. During September, the joint costs of processing were $300,000. Production and sales value information for the month were as follows: Product Units Produced Final Sales Value per Unit Separate Costs A 10,000 $25 $125,000 B 15,000 $30 $250,000 C 12,500 $24 $125,000 What is the constant gross margin percentage for Calamata

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  1. 19 June, 07:03
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    20%

    Explanation:

    Gross profit is the net of sales and cost of sales. Gross Profit percentage is the ratio of gross profit to sales expressed as percentage.

    Product Units Produced Final Sales Value per Unit Separate Costs

    A 10,000 $25 $125,000

    B 15,000 $30 $250,000

    C 12,500 $24 $125,000

    Total 37,500 $500,000

    Sales Value

    A (10,000 x $25) $250,000

    B (15,000 x $30) $450,000

    C (12,500 x $24) $300,000

    Total Sales Value $1,000,000

    Less

    Joint Cost ($300,000)

    Separable cost ($500,000)

    Gross Profit $200,000

    Gross Profit Percentage = ($200,000 / $1,000,000) x 100 = 20%
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