Problem 20: In the year 2001, product A was sold. for $300 per

unit making a gross profit of 20% on sales. The total

production cost was made up of 25% of direct material, 40%

of direct labor, and 35% of factory overhead. Due to general

rise in prices in 2002, the selling price of the product

increased by 15%. The cost of production has also increased

resulting in increase of Material, Labor, and factory overhead

costs by 10%, 15%, and 12% respectively. What will be the

gross profit per unit in 2002?

Question

Carla

Business

1 March, 04:56

Problem 20: In the year 2001, product A was sold. for $300 per

unit making a gross profit of 20% on sales. The total

production cost was made up of 25% of direct material, 40%

of direct labor, and 35% of factory overhead. Due to general

rise in prices in 2002, the selling price of the product

increased by 15%. The cost of production has also increased

resulting in increase of Material, Labor, and factory overhead

costs by 10%, 15%, and 12% respectively. What will be the

gross profit per unit in 2002?

+2

Answers (1)

Know the Answer?

Autumn Dudley · Answer 1

74.52

Explanation:

price = 300

lets assume there were 100 units

old new

sales 30000 34500

Gross profit 6000 7452

Prod cost 24000 27048

DM 6000 6600

DL 9600 11040

OH 8400 9408

Total 24000 27048

new price = 300x115% = 345

so gross profit per unit will be = 7452/100 = 74.52