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    Gross profit/ending inventory and Schedule of Cash Receipts

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    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?

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    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).

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    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

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