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    Gross Profit, Manufacturing costs and Overhead

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    Calculate gross profit for the period in question.

    Beginning Direct Materials $25,000
    Ending Direct Materials 30,000
    Beginning Goods in Process 55,000
    Ending Goods in Process 64,000
    Beginning Finished Goods 80,000
    Ending Finished Goods 67,000
    Cost of Goods Sold for the period 540,000
    Sales revenues for the period 1,254,000
    Operating expenses for the period 232,000

    The three major cost components of a manufactured product are
    a. The three major cost components of a manufactured product are
    b. Indirect labor, indirect materials, and miscellaneous factory expenses.
    c. Direct materials, direct labor, and factory overhead.
    d. Differential costs, opportunity costs, and sunk costs.
    e. General, selling, and administrative costs.

    Which of the following costs would not be classified as factory overhead
    a. Property taxes on maintenance machinery.
    b. Expired insurance on factory equipment.
    c. Wages of the factory janitor
    d. Metal doorknobs used on wood cabinets produced
    e. Small tools used in production.

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    Solution Preview

    1. We use the following equation to calculate the gross profit
    Cost of goods sold = Beginning finished goods inventory + cost of goods ...

    Solution Summary

    The solution explains how to calculate the gross profit, what are the components of manufacturing costs and which costs would be classified as factory overhead