Question

The Bradley Corporation produces a product with the following costs as of July 1, 20X1: Material $4 per unit Labor 4 per unit Overhead 2 per unit Beginning inventory at these costs on July 1 was 4,250 units. From July 1 to December 1, 20X1, Bradley Corporation produced 14,500 units. These units had a material cost of $2, labor of $4, and overhead of $2 per unit. Bradley uses LIFO inventory accounting. a. Assuming that Bradley Corporation sold 18,000 units during the last six months of the year at $13 each, what is its gross profit

Answer 1

Gross profit $83,000

Step-by-step explanation:

The computation of the gross profit is as follows:

Sales (18,000 units × $13) $234,000

Less: Material

(14,500 × $2) -$29,000

(18,000 - 14,500) × $4 -$14,000

Less; labor

(14,500 × $4) -$58,000

(18,000 - 14,500) × $4 -$14,000

Less: Overhead

(14,500 × $2) -$29,000

(18,000 - 14,500) × $2 -$7,000

Gross profit $83,000