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Campus Press produces textbooks for high school accounting courses. The company recently hired a new editor, Jean Green, to handle production and sales of books
Campus Press produces textbooks for high school accounting courses. The company recently hired a new editor, Jean Green, to handle production and sales of books for an introductory accounting course. Jean's compensation depends on the gross margin associated with sales of this book. Jean needs to decide how many copies of the book to produce. The following information is available for the fall semester 2020: (Click the icon to view the information.) Jean has decided to produce either 17,000, 18,700, or 27,200 books. Read the requirements -..-- Requirement 1. Calculate expected gross margin if Jean produces 17,000, 18,700, or 27,200 books. (Make sure you include the production-volume variance as part of cost of goods sold.) Calculate the gross margin for each level of production. Begin with 17,000 books, then 18,700 books, and lastly 27,200 books. (Enter a "0" for any zero balance accounts. If an account does not have a variance, do not select a label.) 18,700 books 27,200 books 17,000 books $1,428,000 Revenues $ 1,428,000 2284800 More info Cost of goods sold 1,207,000 1,207,000 Production-volume variance 28,900 F U Estimated sales 17,000 books Net cost of goods sold 1,207,000 1,178,100 Gross margin $ 221,000 $ 249,900 Beginning inventory O books Average selling price $84 per book Variable production costs $54 per book Fixed production costs $289,000 per semester The fixed-cost allocation rate is based on expected sales and is therefore equal to $289,000 = 17,000 books = $17 per book. Print Done
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