If one unit of Product X1 used $3.50 of direct materials and $4.20 of direct labor, sold for $12.50, and was assigned overhead at the rate of 35% of direct labor costs, how much gross profit was realized from this sale? A. $3.50 B. $5.20 C. $3.33 D. $4.50 E. $8.20

If one unit of Product X1 used $3.50 of direct materials and $4.20 of direct labor, sold for $12.50, and was assigned overhead at the rate of 35% of direct labor costs, how much gross profit was realized from this sale? A. $3.50 B. $5.20 C. $3.33 D. $4.50 E. $8.20

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 2MC: A companys product sells for $150 and has variable costs of $60 associated with the product. What is...

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Question

I am looking for the correct answer to this financial accounting question with appropriate explanations.

If one unit of Product X1 used $3.50 of direct materials and
$4.20 of direct labor, sold for $12.50, and was assigned
overhead at the rate of 35% of direct labor costs, how much
gross profit was realized from this sale?
A. $3.50
B. $5.20
C. $3.33
D. $4.50
E. $8.20

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