Aaron Corporation, which has only one product, has provided the following data c

Question

Aaron Corporation, which has only one product, has provided the following data concerning its most recent month of operations Selling price $ 90 Uni ts in beginning inventory Units produced Units sold Units in ending inventory 3, 400 3, 000 400 Variable costs per unit: Direct materials Direct 1abor Variable manufacturing overhead Variable selling and administrative expense $38 Fixed costs: Fixed manufacturing overhead Fixed selling and administrative expense $54, 400 3, 000 The total gross margin for the month under the absorption costing approach is

Explanation / Answer

a) Total gross margin under absorption costing :

So answer is $27000

5) Contribution margin= (126-49-28-5-11)*1800 = $59400

9) Fixed manufacturing overhead per unit = 432000/9000 = 48 per unit

Fixed manufacturing overhead deferred is 48*1000 = 48000

So answer is a) The amount of fixed manufacturing overhead deferred in inventories is $48000

Sales (3000*90) 270000 Direct material (3000*21) 63000 Direct labour (3000*38) 114000 Variable manufacturing overhead 18000 Fixed manufacturing overhead (54400/3400*3000) 48000 Gross margin $27000

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