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Exercise 9-10 During 2017, Bridgeport Furniture Company purchases a carload of w

ID: 2515545 • Letter: E

Question

Exercise 9-10

During 2017, Bridgeport Furniture Company purchases a carload of wicker chairs. The manufacturer sells the chairs to Bridgeport for a lump sum of $55,000 because it is discontinuing manufacturing operations and wishes to dispose of its entire stock. Three types of chairs are included in the carload. The three types and the estimated selling price for each are listed below.

Type

No. of Chairs

Estimated Selling
Price Each


During 2017, Bridgeport sells 200 lounge chairs, 100 armchairs, and 140 straight chairs.

What is the amount of gross profit realized during 2017? What is the amount of inventory of unsold straight chairs on December 31, 2017? (Round cost per chair to 2 decimal places, e.g. 78.25 and final answer to 0 decimal places, e.g. 5,845.)

$

Type

No. of Chairs

Estimated Selling
Price Each

Lounge chairs 500 $90 Armchairs 400 80 Straight chairs 800 50

Explanation / Answer

Cost per chair = $55000/1700 = $32.35 Gross Profit during 2017 = Total sales - Total costs Total sales =200*90+100*80+140*50=$33000 Total costs = 440*32.35= $14234 GP = 33000 - 14234 = $18766 the amount of inventory of unsold straight chairs on December 31, 2017 =(800-140)*$32.35 = 21351

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