A manufacturing company that produces a single product has provided the followin

Question

A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations Selling price Units Units produced Units sold Units in ending inventory Variable costs per unit: in beginning inventory 2,900 2,500 400 Directmaterials Direct labor Variable manufacturing overhead Variable selling and administrative expense 32 45 2 Fixed costs: Fixed manufacturing overhead Fixed selling and administrative expense $43,500 $15,000 The total gross margin for the month under absorption costing is

Explanation / Answer

Sales (2,500*$117) $ 292,500 Less: Cost of goods sold Direct material (2,500*$32) $    80,000 Direct labour (2,500*$45) $ 112,500 Variable manufacturing overhead (2,500*$2) $      5,000 Fixed manufacturing overhead ($43,500/2,900*2,500) $    37,500 Gross margin $    57,500

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