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esign makes ceramic tiles December sales were 500.000 units Selling price $2 per unit 1.000.000 total sales The Marketing Department, projects sales to Increase by

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esign makes ceramic tiles December sales were 500.000 units Selling price $2 per unit 1.000.000 total sales The Marketing Department, projects sales to Increase by 5% in January February sales will be 15.000 units less than January March sales will be 3% higher than February sales April sales will be the 5,300 units less than march The price is not expected to increase JC inventory policy is to maintain an ending inventory equals to 30% of next month sales. Actual inventory is 168,000 units Clay the material to make the tiles cost $.50 per pound and each tile requires 6 pound. Actual clay Inventory is 60,000 pounds and the inventory policy is to maintain an inventory equal to 25% of next month production requirement April production is expected to be 525.000 units. The cost of direct materials purchased in December was $150,000 Each tile requires 10 hours and the labor hourly rate is $8.00 per hour Variable overhead rate is 20% of labor and fixed overhead is 25.000 monthly Selling and administrative expenses are expected to be Administrative salaries $15,000 per month Sales salaries $12,000 per month Sales commissions 10% of sales 70% of sales are cash sales and the remaining are collected in the next month Material are paid 60% cash and the remaining the next month The company has the following obligations: 100,000 in dividends will be paid in February A new machine will be acquired in January with a cost of 250,000 A short-term loan with an outstanding balance of $150,000 is used to manage the cash position. Interest on the short term loan are 1% monthly Taxes of last quarter were $240,000 and will be paid in March. The company tax rate is 35%, and taxes are paid in the next quarter. REQUIRED: Compute Gross Profit Multiple Choice $3120,600 O $1.079,041 1.548,300 2,041,559 1.560,300 esign makes ceramic tiles December sales were 500.000 units Selling price $2 per unit 1.000.000 total sales The Marketing Department, projects sales to Increase by 5% in January February sales will be 15.000 units less than January March sales will be 3% higher than February sales April sales will be the 5,300 units less than march The price is not expected to increase JC inventory policy is to maintain an ending inventory equals to 30% of next month sales. Actual inventory is 168,000 units Clay the material to make the tiles cost $.50 per pound and each tile requires 6 pound. Actual clay Inventory is 60,000 pounds and the inventory policy is to maintain an inventory equal to 25% of next month production requirement April production is expected to be 525.000 units. The cost of direct materials purchased in December was $150,000 Each tile requires 10 hours and the labor hourly rate is $8.00 per hour Variable overhead rate is 20% of labor and fixed overhead is 25.000 monthly Selling and administrative expenses are expected to be Administrative salaries $15,000 per month Sales salaries $12,000 per month Sales commissions 10% of sales 70% of sales are cash sales and the remaining are collected in the next month Material are paid 60% cash and the remaining the next month The company has the following obligations: 100,000 in dividends will be paid in February A new machine will be acquired in January with a cost of 250,000 A short-term loan with an outstanding balance of $150,000 is used to manage the cash position. Interest on the short term loan are 1% monthly Taxes of last quarter were $240,000 and will be paid in March. The company tax rate is 35%, and taxes are paid in the next quarter. REQUIRED: Compute Gross Profit Multiple Choice $3120,600 O $1.079,041 1.548,300 2,041,559 1.560,300

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