Share
Explore BrainMass

Gross profit/ending inventory and Schedule of Cash Receipts

Gross profit and ending inventory

A corporation produces a product with following costs as of July 1, 2011.
Material $2 per unit Labor $4 per unit Overhead $2 per unit
Beginning inventory at these costs on July 1st was 3,000 units. From July 1 to December 1, 2011 the corporation produced 12,000 units. These units had a materials cost of $3, labor of $5, and overhead of $3 per unit. This corporation uses FIFO inventory accounting.
Assuming that this corporation sold 13,000 units during the last six months of the year at $16 each, what is the gross profit? What is the value of ending inventory?

------------------------------
Schedule of Cash Receipts
Problem 2
Victoria's Apparel has forecast credit sales for the fourth quarter of the year as:
September (actual) $50,000
Fourth Quarter
October $40,000
November $35,000
December $60,000
Experience has shown that 20 percent of sales receipts are collected in the month of sale, 70 percent in the following month, and 10 percent are never collected.
Prepare a schedule of cash receipts for Victoria's apparel covering the fourth quarter (October through December).

Attachments

Solution Preview

Gross profit and ending inventory
Problem 1
A corporation produces a product with following costs as of July 1, 2011.
Material $2 per unit Labor $4 per unit Overhead $2 per unit
Beginning inventory at these costs on July 1st was 3,000 units. From July 1 to December 1, 2011 the corporation produced 12,000 units. These units had a materials cost of $3, labor of $5, and overhead of $3 per unit. This corporation uses FIFO inventory accounting.
Assuming that this corporation sold ...

Solution Summary

Solution helps in estimating Gross profit/ending inventory and Schedule of Cash Receipts

$2.19