Jean Peck\'s Furniture manufactures tables for hospitality sector. It takes only

Question

Jean Peck's Furniture manufactures tables for hospitality sector. It takes only bulk orders and each table is sold for $500 after negotiations. In the month of January, it manufactures 3,100 tables and sells 2,700 tables. Actual fixed costs are the same as the amount of fixed costs budgeted for the month. The following information is provided for the month of January; Variable manufacturing costs $130 per unit Fixed manufacturing costs $105,000 per month Fixed Administrative expenses $30,000 per month At the end of the month Jean Peck's Furniture has an ending inventory of finished goods of 400 units. The company also incurs a sales commission of $13 per unit What is the gross margin when using absorption costing? (Round any intermediary calculations to the nearest cent and your final answer to the nearest dollar.) A.

Explanation / Answer

Working Amount $ Amount $ Sales 2700*500 1350000 Less Cost Of Good Sold Opening Inventory 0 Cost Of Manufacturing 3100*[130+(105000/3100)] 507997 Less Cost of closing inventory 400*163.87 65548 442449 Gross Margin 907551 Less : Fixed Admin Cost 30000 Less : Selling Commission 2700*13 35100 Net Income 842451

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