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What would be the gross profit

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Question - A company reported the following information for the production and sale of 600,000 gallons of oil:

Sales $2,100,000

Production costs:

Direct materials $500,000

Direct labor $800,000

Applied overhead (using ABC)

Overhead based on number of gallons 390,000

Overhead based on number of batches 150,000

Overhead based on number of machine hours 270,000

Total Production costs 2,110,000

Gross profit ($ 10,000)

Overhead was applied based on the following predetermined overhead rates:

$0.65 per gallon

$400 per batch

$90 per machine hours

Required - What would be the gross profit if the company increased the selling price per gallon by $0.15?

Reference no: EM132631917

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