please show steps 5 Pederson Company reported the following

please show steps

5) Pederson Company reported the following: 5) Manufacturing costs Units manufactured Units sold Beginning inventory $2,000,000 50,000 47,000 units sold for $75 per unit units What is the amount of gross profit margin? A) $3,525,000 B) $1,645,000 C) $1,750,000 D) $5,405,000

Solution

Correct answer is B

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Gross profit margin = Sales – cost of goods sold

Sales = Units sold * price per unit

           = 47000 * 75

            = $3525000

Cost of goods sold = Units sold * cost per units

                                   = 47000 * (2000000/50000)

                                    = 47000 * 40

                                    = $1880000

Gross margin = 3525000 – 1880000

                         = $1645000

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