Gabuat Corporation, which has only one product, has provided the following data

Question

Gabuat Corporation, which has only one product, has provided the following data concerning its most recent month of operations: Selling price $ 114 Units in beginning inventory 0 Units produced 2,900 Units sold 2,410 Units in ending inventory 490 Variable costs per unit: Direct materials $ 38 Direct labor $ 24 Variable manufacturing overhead $ 5 Variable selling and administrative expense $ 7 Fixed costs: Fixed manufacturing overhead $ 31,900 Fixed selling and administrative expense $ 24,100 The total gross margin for the month under the absorption costing approach is:

Explanation / Answer

unit product cost Direct materials 38 direct labor 24 variable manufacturing overhead 5 fixed manufacturing overhead (31900/2900) 11 unit product cost 78 Gross margin = sales - cost of goods sold (114-78)*2410 86760 answer

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