Global Press produces textbooks for high school accounting courses. The company recently hired a new editor, Riley Green, to handle production and sales of book for an introduction to accounting course. Riley's compensation depends on the gross margin associated with sales of this book. Riley needs to decide how many copies of the book to produce. The following information is available for the fall semester 2017: (Click the icon to view the information.) Riley has decided to produce either 18,000, 27,000, or 29,700 books. Read the requirements. Requirement 1. Calculate expected gross margin if Riley produces 18,000, 27,000, or 29,700 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 18,000 books, then 27,000 books, and lastly 29,700 books. (Enter a "0" for any zero balance accounts. If an account does not have a variance, do not select a label.) Revenues Cost of goods sold 18,000 books 27,000 books 29,700 books Production-volume variance Net cost of goods sold Gross margin Requirement 2. Calculate ending inventory in units and in dollars for each production level. (Complete all answer boxes. For amounts with a "0" unit or dollar balance, make sure to enter "0" in the appropriate cell.) Estimated sales Beginning inventory Average selling price 18,000 books 0 books $83 per book Variable production costs $46 per book Fixed production costs $288,000 per semester The fixed-cost allocation rate is based on expected sales and is therefore equal to $288,000/18,000 books = $16 per book. a. Incorporate a charge of 15% of the cost of the ending inventory as an expense for evaluating the manager. (Complete all answer boxes. For a $0 change, make sure to enter "0" in the appropriate cell.) Gross margin Ending inventory charge 18,000 books 27,000 books 29,700 books Adjusted gross margin b. Include nonfinancial measures when evaluating management and rewarding performance. One nonfinancial measure is to compute the excess production ratio. Determine the formula, then compute the ratio at each production level. (Round the ratios to two decimal places.) # of books 18,000 27,000 29,700 = Excess production ratio = 1 =