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?

Question

Business

Frankie

21 January, 00:29

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?

+5

Answers (1)

Know the Answer?

Nickolas · Answer 1

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