Question

In july, noel & vang company purchased materials costing $23,100 and incurred direct labor cost of $19,800. manufacturing overhead totaled $35,200 for the month. information on inventories was as follows: july 1 july 31 materials $6,820 $7,810 work in process 770 1,320 finished goods 3,630 2,970 if noel & vang company sold 10,300 units during july and its gross margin totaled $32,780, what was the sales price per unit? (note: round answer to two decimal places.)
a. $10.11


b. $9.94


c. $10.09


d. $10.68

Answer 1

Answer:

d. $10.68

Explanation:

The computation of sales price per unit is shown below:-

Sales = Cost of Goods Sold + Gross Margin

For computing the sales price per unit first we need to find out the cost of goods sold

Statement of Cost of Goods Sold

Direct material (on July 1)                $6,820

Add:- Purchase Direct Materials        $23,100

Less:- Direct Materials (on July 31) ($7,810)

Direct Material used in Production        $22,110

Add:- Direct Labor                                 $19,800

Manufacturing overhead                       $35,200

Total Production Cost                            $77,110

Add:- Work in process (on July 1)          $770

Less:- Work in process (on July 31)        ($1,320)

Cost of Goods Manufactured                  $76,560

Add:- Finished Goods (on July 1)             $3,630

Less:- Finished Goods (on July 31)          ($2,970)

Cost of Goods Sold                                   $77,220

Sales = Cost of Goods Sold + Gross Margin

=$77,220 + $32,780

= $110,000

Sales price per unit = Sales ÷ Number of Units Sold

= $110,000 ÷ 10,300

= $10.68