He Bradley Corporation produces a product with the following costs as of July 1, 20X1: Material $5 per unit Labor 3 per unit Overhead 1 per unit Beginning inventory at these costs on July 1 was 3,200 units. From July 1 to December 1, 20X1, Bradley Corporation produced 12,400 units. These units had a material cost of $4, labor of $6, and overhead of $4 per unit. Bradley uses LIFO inventory accounting.

a. Assuming that Bradley sold 16,800 units during the last six months of the year at $13 each, what is its gross profit?

b. ending inventory value?

Question

Business

Atticus

20 November, 05:32

He Bradley Corporation produces a product with the following costs as of July 1, 20X1: Material $5 per unit Labor 3 per unit Overhead 1 per unit Beginning inventory at these costs on July 1 was 3,200 units. From July 1 to December 1, 20X1, Bradley Corporation produced 12,400 units. These units had a material cost of $4, labor of $6, and overhead of $4 per unit. Bradley uses LIFO inventory accounting.

a. Assuming that Bradley sold 16,800 units during the last six months of the year at $13 each, what is its gross profit?

b. ending inventory value?

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Answers (1)

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Adrienne · Answer 1

Instructions are listed below.

Explanation:

Giving the following information:

July 1, 20X1:

Material $5 per unit

Labor $3 per unit

Overhead $1 per unit

Total cost = $9

Beginning inventory = 3,200 units.

December 1, 20X1:

Bradley Corporation produced 12,400 units.

These units had a material cost of $4, labor of $6, and overhead of $4 per unit.

Total cost = $14

A) Units sold = 16,800 units

Selling price = $13

The total inventory is = 3,200+12,400 = 15,600

We will assume that production levels with sales.

Sales = 16,800*13 = $218,400

Cost of goods sold = (3,200*9 + 13,600*14) = (219,200)

Gross profit = (800)

B) We will assume the ending inventory is 300 units:

Inventory = 300*14 = $4,200