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Convex Mechanical Supplies produces a product with the following costs as of July, 1 2012:

material $6
labor 4
overhead 2
$12
Beginning inventory at these costs on July 1 was 5,000 units. From July 1 to Deceber 1, Convex produced 15,000 units. These units had a material cost of $10 per unit . The costs for labor and overhead were the same. Convex uses FIFO inventory accounting.

Assuming the Convex sold 17,000 units during the last six months of the year at $20 each, what would gross profit be? What is the value ending inventory?

Respuesta :

facundobuzzetti

Answer:

Gross profit= $88,000

Inventory= $48,000

Explanation:

Giving the following information:

material $6

labor $4

overhead $2

Beginning inventory at these costs on July 1 was 5,000 units. From July 1 to December 1, Convex produced 15,000 units. These units had a material cost of $10 per unit.

Convex sold 17,000 units during the last six months of the year at $20 each.

First, we need to find the cost of goods sold:

COGS= 5,000*12 + 12,000*(10+4+2)= 252,000

Gross profit= 17,000*20 - 252,000= $88,000

Inventory= 3,000*16= $48,000

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