Converse Supplies produces a product with the following costs as of July 1, 2009.
Beginning inventory at these costs on 1 July was 5,000 units. From 1 July to 1 December, Converse produced 15,000 units. These units had a material cost of $10 per unit. The costs for labor and overhead were the same. Converse uses FIFO inventory accounting. Assuming that converse sold 17,000 units during the last 6 months of the year at $20, what would gross profit be? What is the value of ending inventory?
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** Please see the attached file for the complete solution response **
Units Cost Per unit
Beginning inventory 5,000 $60,000 $12
Production during the period 15,000 $240,000 $16
FIFO Inventory valuation
Sales 17,000 $340,000
Less: Cost ...
This solution provides a detailed a computation of the given accounting problem.