Question

Exercise 9-10 During 2020, Bramble Furniture Company purchases a carload of wicker chairs. The manufacturer sells the chairs to Bramble for a lump sum of $35,910 because it is discontinuing manufacturing operations and wishes to dispose of its entire stock. Three types of chairs are included in the carload. The three types and the estimated selling price for each are listed below. Type No. of Chairs Estimated Selling Price Each Lounge chairs 240 $90 Armchairs 180 80 Straight chairs 420 50 During 2020, Bramble sells 120 lounge chairs, 60 armchairs, and 72 straight chairs. What is the amount of gross profit realized during 2020? What is the amount of inventory of unsold straight chairs on December 31, 2020? (Round cost per chair to 2 decimal places, e.g. 78.25 and final answer to 0 decimal places, e.g. 5,845.) Gross profit realized during 2020 $enter a dollar amount Amount of inventory of unsold straight chairs $enter a dollar amount

Answer 1

	A	B	C = AXB	D = C/total of C	E	F = D X E	G = F/A
Particulars	No. of chairs	Sales price per chair	Total sales price	Relative to sales price	Total cost	cost allocated to chair	cost per chair
Lounge chairs	240	90	21600	0.37894737	35910	13608	56.7
Arm chairs	180	80	14400	0.25263158	35910	9072	50.4
Straight chairs	420	50	21000	0.36842105	35910	13230	31.5
Totals			57000

Particulars	No. of chairs	cost per chair	Cost of sold chairs	Selling price	Sales value	Gross profit = Sales -cost
Lounge chairs	120	56.7	6804	90	10800	3996
Arm chairs	60	50.4	3024	80	4800	1776
Straight chairs	72	31.5	2268	50	3600	1332
Totals			12096		19200	7104

Gross profit = $ 7104

Amount of inventory of unsold straight chairs = (420-72) X31.5 =$ 10962