Skytech corporation manufactures and sells drones used in defense and public Safety. The SKT20 Model has a list price of $54,000 and a production cost of $43,000. Currently (in 2021) there are 150 finished SKT20 Units in inventory ($43,000 manufactueing cost per unit). Due to recent improvements in manufacturing processes, the cost of new production is expected to be $35,000 in 2022. This will result in a price reduction of $6,000 at the beginning of 2022. This price reduction undercuts the prices of generally comparable competing models by other manufacturers. Moreover the SKT20 model is often sold below the list price to both individual (non-repeat) and regular industrial cilents. Individual cilents have 4% discount whereas regular industrial cilents, who comprise 60% of the company's overall client base, get 8% discount. Skytech also pays 5% commission to its sales agents on the actual sales, the buyer covers the cost of shipping, Assume that early in 2022 Skytech sells 50 SKT20 drones for $47,000 each. 

Assuming the company uses FIFO, how much gross profit will be recorded?

Answer rating: 100% (QA)

Sales 50x47000 2350000 Cost of sales 50x43000 2150000 ... View the full answer