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 3,500 units. From July 1 to December 1, 20X1, Bradley Corporation produced 13,000 units. These units had a material cost of $4, labor of $6, and overhead of $4 per unit. Bradley uses LIFO inventory accounting. a. Assuming that Bradley Corporation sold 15,000 units during the last six months of the year at $19 each, what is its gross profit

Answer 1

Answer: $83000

Step-by-step explanation:

The gross profit will be:

Sales = 15000 × $19 = $285000

Less Cost of goods sold from new inventory = 13000 × $14 = $182000

Less Cost of goods sold from old inventory = 2000 × $10 = $20000

Total cost of goods sold = $182000 + $20000 = $202000

Gross profit = $285000 - $202000

Gross profit = $83000