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A

Anonymous

Feb 09, 2025

Convex Mechanical Supplies produces a product with the following costs as of July 1, 20X1: Material $5 Labor 3 Overhead 2 $10 Beginning

Convex Mechanical Supplies produces a product with the following costs as of July 1, 20X1: Material $5, Labor $3, and Overhead $2, for a total of $10. The beginning inventory at these costs on July 1 consisted of 11,500 units. From July 1 to December 1, Convex produced an additional 26,000 units, which had a material cost of $7 per unit, while the costs for labor and overhead remained the same. Convex uses FIFO (First-In, First-Out) inventory accounting.

a. Assuming that Convex sold 28,000 units during the last six months of the year at a price of $14 each, what would be the gross profit?

3 Answers

J
John Koch

Dec 10, 2024

Gross profit= $79,000Explanation:Giving the following information: July 1, 20X1: Material $5 Labor 3 Overhead 2 Total= $10 Beginning inventory at these costs on July 1 was 11,500 units. From July 1 to December 1, Convex produced 26,000 units. These units had a material cost of $7 per unit. First, we need to determine the cost of goods sold. Under the FIFO (first-in, first-out) method, the COGS is calculated using the cost of the first units produces.COGS= 11,500*10 + 16,500*12= $313,000Now, we can calculate the gross profit:Gross profit= sales - cogsGross profit= 28,000*14 - 313,000Gross profit= $79,000

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