Exercise 9-10 During 2017, Bramble Furniture Company purchases a carload of wick

Question

Exercise 9-10 During 2017, Bramble Furniture Company purchases a carload of wicker chairs. The manufacturer sells the chairs to Bramble for a lump sum of $63,800 because it is discontinuing manufacturing operations and wishes to dispose of its entire stock. Three types of chairs are included in the carload. The three types and the estimated selling price for each are listed below. Estimated Price Each $90 80 50 Selling No. of Chairs 400 400 800 Type Lounge chairs Armchairs Straight chairs During 2017, Bramble sells 100 lounge chairs, 110 armchairs, and 110 straight chairs. What is the amount of gross profit realized during 2017? What is the amount of inventory of unsold straight chairs on December 31, 2017? (Round cost per chair to 2 decimal places, e.g. 78.25 and final answer to O decimal places, e.g. 5,845.) Gross profit realized during 2017 Amount of inventory of unsold straight chairs s

Explanation / Answer

1) Calculation of Gross profit during 2017 :

Amount of Inventory sold :

=(100*$90 + 110*$80 + 110*$50) * 63,800 / (400*$90 + 400*$80 + 800*$50)

= $23,300 * $63,800 / $108,000

= $13,764

Gross profit realized = $23,300 - $13,764

= $9,535

Amount of Inventory unsold = $63,800 - $13,764

= $50,036

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