Answer:
Estimated cost of goods sold $ 3,964,800
Gross Margin $ 991,200
Explanation:
Estimated sales units and sales revenue
June 8,800 units
July 19,000 units
August 21,000 units
September 22,000 units
Total estimated sales 70,800 units
Sales price per unit $ 70
Total Sales Revenue $ 70 * 70,800 units = $ 4,956,000
Computation of cost of goods sold
Direct Material
5 pounds * 70,800 units * $ 2.40 per pound $ 849,600
Direct Labor
2 labor hours * 70,800 units * $ 12 per hour $ 1,699,200
Variable Manufacturing Overhead
$ 10 * 70,800 units * 2 labor hours <u>$ 1,416,000</u>
Cost of goods sold $3,964,800
Computation of gross margin
Sales Revenue $ 4,956,000
Cost of goods sold <u>$ 3, 964,800</u>
Gross Margin $ 991,200
