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.$9.94

b.$10.09

c.$10.11

d.$10.68

Answer 1

Solution:- First of all we calculate Cost of Goods Sold and then we calculate selling price,Gross Margin is given.

We know that,

Sales=Cost of Goods Sold+Gross Margin

So we Calculating Cost of Goods Sold first by this statement:-

Statement of Cost of Goods Sold

Items	Amount ($)
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

So we have Cost of Goods Sold & Gross Margin both, now we can calculate Sales by adding both Cost of Goods Sold &Gross Margin:-

Sales=(Cost of Goods Sold+Gross Margin)

   =$(77,220+32,780)

   =$110,000

Noel &Vang Company sold 10,300units ,thus calculate selling price per, by dividing sales with number of units sold.

Sales price per unit=(Sales÷ No.of Units Sold)

   =$(110,000÷10,300)

   =$10.68

So the Answer is d $10.68