Answer: The answers are given below
Explanation:
a. Find the finished goods inventory, January 1.
The cost of good sold will be:
= (cost of good manufactured + finished good inventory beginning) - finished good inventory ending
$21,900 = $21,940 + finished good inventory beginning - $3500
Finished good inventory beginning will now be:
=$21900 - $21,040 + $3500
Finished good inventory January 1 = $4,360
b. Find the direct materials used for the year.
The total manufacturing cost will be:
= direct material + direct labour + manufacturing overhead
$19,460 = direct material + $3160 + $5710
Direct material = $19,460 - $3160 - $5710
Direct material = $10,590
c. Find the Sales revenue.
Gross margin will be :
= Sales revenue - cost of good sold
Let the sales revenue be y
Therefore,
37% of y = y - $21,900
0.37y = y - $21,900
y - 0.37y = $21,900
0.63y = $21,900
y = $21,900/0.63
y = $34,761.9
y = $34,762 approximately
The sales revenue is $34,762
