During its first year of operations, Silverman Company paid $14,000 for direct materials and $19,000 for production workers' wages. Lease payments and utilities on the production facilities amounted to $17,000 while general, selling, and administrative expenses totaled $8,000. The company produced 5,000 units and sold 3,000 units at a price of $15.00 a unit. What is the amount of gross margin for the first year? A) $15,000 B) $24,000 C) $20,000 D) $45,000
Answer: (A) $15000
Gross margin is a company's net sales revenue minus its cost of goods sold (COGS). In other words, it is the sales revenue a company retains after incurring the direct costs associated with producing the goods it sells, and the services it provides.
Computation of Gross Margin:-
Computation of cost of goods: | |||
Direct material | $ 14,000.00 | ||
Direct Labour | $ 19,000.00 | ||
Direct overhead | $ 17,000.00 | ||
Total | $ 50,000.00 | (A) | |
Units Produced | 5,000.00 | units | (B) |
Cost per unit | $ 10.00 | (A/B) | |
Computation of gross margin:- | |||
Particulars | Amount | Calculation | |
Sales | $ 45,000.00 | (3000units * $15) | |
Cost of goods sold | $ 30,000.00 | (3000unit*$10) | |
Gross Margin | $ 15,000.00 |
During its first year of operations, Silverman Company paid $14,000 for direct materials and $19,000 for...
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During its first year of operations, Silverman Company paid $12,065 for direct materials and $10,800 for production workers' wages. Lease payments and utilities on the production facilities amounted to $9,800 while general, selling, and administrative expenses totaled $3,700. The company produced 6,950 units and sold 4,300 units at a price of $7.20 a unit. What is the amount of gross margin for the first year? Multiple Choice oo $30,960 $8,095 o $ 10,750
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During its first year of operations, Silverman Company pold $10,740 for direct materials and $11,300 for production workers' wages. Lease payments and utilities on the production facilities amounted to $10,300 while general, selling, and administrative expenses totaled $3,200. The company produced 7,700 units and sold 4,800 units at a price of $6.70 a unit. What is the amount of finished goods Inventory on the balance sheet at year-end? Multiple Choice $12,000 $12.100 o $6,000 $2,900
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