on the gross margin associated with saies of this book. Jaden needs to decide ho

Question

on the gross margin associated with saies of this book. Jaden needs to decide how many copies of the book to produce. The following information is available for the fail semester 2017: aden has decided to produce either 29,000, 37,700, or 43,500 books More Info do not 29,000 books as part of cost of goods sold) 0 books Beginning inventory Average selling price Variable production costs $ Fixed production costs 638,000 per semester 3. Managers who are paid a bonus that is a function of gross margin may be inspired to produce a product in excess Print Done

Explanation / Answer

Answer 1. 29,000 Books 37,700 Books 43,500 Books Revenues    2,204,000.00    2,865,200.00    3,306,000.00 Cost of Goods Sold    2,001,000.00    2,601,300.00    3,001,500.00 Production Volume Variance                         -       (191,400.00)     (319,000.00) Net Cost of Goods Sold    2,001,000.00    2,409,900.00    2,682,500.00 Gross Margin        203,000.00        455,300.00        623,500.00 Cost of Goods Sold = ($47 + $22) X 29,000 Nos = $2,001,000 Cost of Goods Sold = ($47 + $22) X 37,700 Nos = $2,601,300 Cost of Goods Sold = ($47 + $22) X 43,500 = $3,001,500 Production Volume Variance = Allocatetd Fixed MOH - Budgeted Fixed MOH 29,000 Books 37,700 Books 43,500 Books Allocated Fixed MOH        638,000.00        829,400.00        957,000.00 Budgeted Fixed MOH        638,000.00        638,000.00        638,000.00 Production Volume Variance (U)                         -          191,400.00        319,000.00 Answer 2. 29,000 Books 37,700 Books 43,500 Books Beginning Inventory                         -                           -                           -   Add: Production in Units          29,000.00          37,700.00          43,500.00 Less: Units Sold        (29,000.00)        (29,000.00)        (29,000.00) Ending Inventory in Units                         -              8,700.00          14,500.00 Cost per Unit                  69.00                  69.00                  69.00 Cost of Ending Inventory in $                         -          600,300.00    1,000,500.00 Answer 3-a. 29,000 Books 37,700 Books 43,500 Books Gross Margin        203,000.00        455,300.00        623,500.00 Ending Inventory Change                         -          (30,015.00)        (50,025.00) Adjusted Gross Margin        203,000.00        485,315.00        673,525.00 Answer 3-b. 29,000 Books 37,700 Books 43,500 Books Inventory Change: End Inventory - Begin Inventory                         -              8,700.00          14,500.00 Excess Production (%) Production / Sales 100% 130% 150%

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