poration produces fine cabinets. The company uses a job-order costing system in

ID: 342441 • Letter: P

Question

poration produces fine cabinets. The company uses a job-order costing system in which its predeterm s provided below for the most recent month: overhead rate is based on capacity The capacity of the factory is determined by th capacity of the factory is determined by the capacity of its constraint, which is an automated jointer Estimates at the beginning of the month: Estinated total fixed manufacturing overhead capacity of the jointer $14,256 240 hours sales Direct materials Direet labor Actual total fixed manufacturing overhead $62, 310 $14,100 $16,000 $14,256 s 8,900 hours of jointer use 220 hours that would be reported on the income statement prepared for internal management purposes would be closest to: Prey 7 of 25 0 Next

Explanation / Answer

Risser Woodworking Corporation

Determination of the gross margin to be reported on the income statement prepared for internal management purposes:

Answer - $17,954

Working –

Sales

$62,310

cost of goods sold -

direct materials

$14,100

direct labor

$16,000

manufacturing overhead

$14,256

cost of goods sold

$44,356

Gross Margin

$17,954