1. **Stating the problem:** We have a profit statement with sales, costs, and profits, and production and sales data for two periods. We want to understand the profit structure and analyze the data. 2. **Given data:** - Sales: 20,000 units, total sales 400,000 - Cost of Goods Sold (COGS): 240,000 - Variable Cost: 60,000 - Fixed Overhead: 300,000 - Gross Profit: 100,000 - Selling and Distribution (fixed): 20,000 - Net Profit: 80,000 3. **Period data:** | Period | Production | Sales | |--------|------------|-------| | 1 | 24,000 | 18,000| | 2 | 18,000 | 21,000| 4. **Formula and explanation:** - Gross Profit = Sales - COGS - Net Profit = Gross Profit - Selling and Distribution Expenses - Variable Cost per unit = Total Variable Cost / Units Sold 5. **Calculate variable cost per unit:** $$\text{Variable Cost per unit} = \frac{60,000}{20,000} = 3$$ 6. **Calculate fixed overhead per unit:** Fixed overhead is total 300,000, which is fixed and does not change with units. 7. **Calculate sales price per unit:** $$\text{Sales price per unit} = \frac{400,000}{20,000} = 20$$ 8. **Calculate contribution margin per unit:** $$\text{Contribution margin} = \text{Sales price per unit} - \text{Variable cost per unit} = 20 - 3 = 17$$ 9. **Check gross profit:** $$\text{Gross profit} = \text{Contribution margin} \times \text{Units sold} - \text{Fixed overhead} = 17 \times 20,000 - 300,000 = 340,000 - 300,000 = 40,000$$ This differs from given gross profit 100,000, so likely fixed overhead is included differently or data needs reconciliation. 10. **Net profit calculation:** $$\text{Net profit} = \text{Gross profit} - \text{Selling and Distribution} = 100,000 - 20,000 = 80,000$$ 11. **Summary:** - Sales price per unit: 20 - Variable cost per unit: 3 - Contribution margin per unit: 17 - Fixed overhead total: 300,000 - Selling and distribution fixed: 20,000 - Net profit: 80,000 This analysis helps understand cost structure and profitability.