Purchase Solution

how to find out gross profit, percent mark up and net profit

Not what you're looking for?

Ask Custom Question

Michael, Corey, and Jessica received an SBA loan to start a business. They operated the business for twelve months without agreement on the formal or legal form of ownership and structure. However, they all worked together and contributed equally to the operations. The business makes and sells Aggie Pride Hug Pillows.

Read the following and respond accordingly. You must show your calculations and logical steps taken to get credit. (Example: Gross Profit = revenue minus total production expenditure)

a.) In the first year, the business made and sold 6000 units of Pillows. It costs $5.00 per unit to manufacture the product and this does not include the operating expenditures. If the team sold each unit for $11.00, what is the gross profit in this first twelve months?

b.) What is the percentage (%) mark up on per unit cost?

c) .If the operating expenditure per unit is $4.00, what is the net profit in this first year?

d.) If the business is required to pay a 5% tax on its net profit, what are the tax amount and the profit after tax?

e.) If the three owners decide to share the net profit equally, how much will each receive and what form of business organization is defined by this decision? Explain?

Purchase this Solution

Solution Summary

The solution provides step-by-step explanations how to find the gross profit, percent mark up and net profit.

Solution Preview

A. In the first year, the business made and sold 6000 units of Pillows. It costs $5.00 per unit to manufacture the product and this does not include the operating expenditures. If the team sold each unit for $11.00, what is the gross profit in this first twelve months? (10 points)

Gross profit=unit number x (selling price ...

Purchase this Solution


Free BrainMass Quizzes
Academic Reading and Writing: Critical Thinking

Importance of Critical Thinking

Lean your Process

This quiz will help you understand the basic concepts of Lean.

Understanding Management

This quiz will help you understand the dimensions of employee diversity as well as how to manage a culturally diverse workforce.

Operations Management

This quiz tests a student's knowledge about Operations Management

Change and Resistance within Organizations

This quiz intended to help students understand change and resistance in organizations