Question

Sully Company provided the following information for last month. Production in units 3,000 Direct materials cost $7,000 Direct labor cost $10,000 Overhead cost $9,600 Sales commission per unit sold $4 Price per unit sold $29 Fixed selling and administrative expense $7,000 There were no beginning and ending inventories. What is gross margin for Sully Company last month? a.$54,000 b.$47,400 c.$32,400 d.$60,400 e.$64,600

Answer 1

Answer:

d.$60,400

Explanation:

The computation of the gross margin is shown below:

= Sales -  Direct materials cost - Direct labor cost - Overhead cost

where,

Sales = 3,000 units × $29 = $87,000

And all the other items would remain the same

Now put these values to the above formula  

So, the value would equal to

= $87,000 - $7,000 - $10,000 - $9,600

= $60,400