gabuat corporation, which has only one product, has provided the following data concerning its most recent…

gabuat corporation, which has only one product, has provided the following data concerning its most recent month of operations: selling price $151 units in beginning inventory 0 units produced 2,900 units sold 2,380 units in ending inventory 520 variable costs per unit: direct materials $53 direct labor $27 variable manufacturing overhead $6 variable selling and administrative expense $8 fixed costs: fixed manufacturing overhead $49,300 fixed selling and administrative expense $7,140 the total gross margin for the month under the absorption costing approach is: multiple choice $95,200 $202,300 $107,100 $114,240

gabuat corporation, which has only one product, has provided the following data concerning its most recent month of operations: selling price $151 units in beginning inventory 0 units produced 2,900 units sold 2,380 units in ending inventory 520 variable costs per unit: direct materials $53 direct labor $27 variable manufacturing overhead $6 variable selling and administrative expense $8 fixed costs: fixed manufacturing overhead $49,300 fixed selling and administrative expense $7,140 the total gross margin for the month under the absorption costing approach is: multiple choice $95,200 $202,300 $107,100 $114,240

Answer

Explanation:

Step1: Calculate unit product cost under absorption costing

Unit - product cost = Direct materials + Direct labor+ Variable manufacturing overhead+ Fixed manufacturing overhead per unit Fixed manufacturing overhead per unit = $\frac{Fixed\ manufacturing\ overhead}{Units\ produced}=\frac{49300}{2900}=17$ Unit - product cost = $53 + 27+6 + 17=103$

Step2: Calculate cost of goods sold

Cost of goods sold = Units sold×Unit product cost Cost of goods sold = $2380\times103 = 245140$

Step3: Calculate sales revenue

Sales revenue = Selling price×Units sold Sales revenue = $151\times2380 = 359380$

Step4: Calculate gross margin

Gross margin = Sales revenue - Cost of goods sold Gross margin = $359380-245140 = 114240$

Answer:

$114,240$