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7 May, 13:35

He Bradley Corporation produces a product with the following costs as of July 1, 20X1: Material $5 per unit Labor 3 per unit Overhead 1 per unit Beginning inventory at these costs on July 1 was 3,200 units. From July 1 to December 1, 20X1, Bradley Corporation produced 12,400 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 sold 16,800 units during the last six months of the year at $13 each, what is its gross profit?

b. ending inventory value?

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  1. 7 May, 17:25
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    Instructions are listed below.

    Explanation:

    Giving the following information:

    July 1, 20X1:

    Material $5 per unit

    Labor $3 per unit

    Overhead $1 per unit

    Total cost = $9

    Beginning inventory = 3,200 units.

    December 1, 20X1:

    Bradley Corporation produced 12,400 units.

    These units had a material cost of $4, labor of $6, and overhead of $4 per unit.

    Total cost = $14

    A) Units sold = 16,800 units

    Selling price = $13

    The total inventory is = 3,200+12,400 = 15,600

    We will assume that production levels with sales.

    Sales = 16,800*13 = $218,400

    Cost of goods sold = (3,200*9 + 13,600*14) = (219,200)

    Gross profit = (800)

    B) We will assume the ending inventory is 300 units:

    Inventory = 300*14 = $4,200
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