Concept of constant gross margin percentage method


Eden Company manufactures two products, Brights and Dulls, from a joint process. A production run costs $50,000 and results in 250 units of Brights and 1,000 units of Dulls. Both products must be processed past the split-off point, incurring separable costs of $60 per unit for Brights and $40 per unit for Dulls. The market price is $250 for Brights and $200 for Dulls.

What is the gross profit for Dulls assuming the constant gross margin percentage method is used?

A) $120,000

B) $150,000

C) $37,500

D) $200,000

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Accounting Basics: Concept of constant gross margin percentage method
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