Calculate Total Gross Margin Under Absorption Costing

Question

A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations:

Selling price

$139

   

Units in beginning inventory

0

Units produced

2,990

Units sold

2,760

Units in ending inventory

230

   

Variable cost per unit:

 

Direct materials

$50

Direct labor

$15

Variable manufacturing overhead

$12

Variable selling and administrative

$9

Fixed costs:

 

Fixed manufacturing overhead

$107,640

Fixed selling and administrative expenses

$24,840

The total gross margin for the month under absorption costing is:

a. $71,760

b. $22,080

c. $135,480

d. $146,280

 

Summary

The question belongs to Accounting and it discusses about calculation of total gross margin under absorption costing.

Total Word Count 29

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