Question

abuat Corporation, which has only one product, has provided the following data concerning its most recent month of operations: Selling price $ 135 Units in beginning inventory 0 Units produced 2,700 Units sold 2,210 Units in ending inventory 490 Variable costs per unit: Direct materials $ 37 Direct labor $ 27 Variable manufacturing overhead $ 7 Variable selling and administrative expense $ 8 Fixed costs: Fixed manufacturing overhead $59,400 Fixed selling and administrative expense $6,630 The total gross margin for the month under the absorption costing approach is:

Answer 1

$92,820

Step-by-step explanation:

Calculation to determine what The total gross margin for the month under the absorption costing approach is:

First step is to calculate the Absorption costing unit product cost

Direct materials $ 37

Direct labor $ 27

Variable manufacturing overhead $ 7

Fixed manufacturing overhead cost $22 ($59,400/2,700)

Absorption costing unit product cost $93

Now let calculate the The total gross margin for

Sales $298,350

($ 135 per unit × 2,210 units)

Less Cost of goods sold $205,530

($93 per unit × 2,210 units)

Gross margin $92,820

($298,350-$205,530)

Therefore The total gross margin for the month under the absorption costing approach is:$92,820