Answered step by step
Verified Expert Solution
Question
1 Approved Answer
I need help with the calculations for 21,000 books and 31,500 books. Academy Press produces textbooks for high school accounting courses. The company recently hired
I need help with the calculations for 21,000 books and 31,500 books.
Academy 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 introduction to 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 2017: (Click the icon to view the information.) Jean has decided to produce either 15,000, 21,000, or 31,500 books. Read the requirements. Estimated sales 15,000 books O books Beginning inventory Average selling price Variable production costs $81 per book $52 per book Fixed production costs $255,000 per semester The fixed-cost allocation rate is based on expected sales and is therefore equal to $255,000/15,000 books = $17 per book. Requirement 1. Calculate expected gross margin if Jean produces 15,000, 21,000, or 31,500 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 15,000 books, then 21,000 books, and lastly 31,500 books. (Enter a "0" for any zero balance accounts. If an account does not have a variance, do not select a label.) 15,000 books $1,215,000 21,000 books 1,215,000 Revenues Cost of goods sold 1,035,000 1,035,000 Production-volume variance Net cost of goods sold 1,035,000 $ 180,000 Gross marginStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started