Northern Press produces textbooks for high school accounting courses. The company recently hired a new editor, Leslie Green, to handle production and sales of books for an introductory accounting course. Leslie's compensation depends on the gross margin associated with sales of this book. Leslie 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.) Leslie has decided to produce either 24,000, 30,000, or 36.000 books. Read the requirements. Requirement 1. Calculate expected gross margin if Leslie produces 24,000, 30,000, or 36,000 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 24,000 books, then 30,000 books, and lastly 36,000 books. (Enter a "0" for any zero balance accounts. If an account does not have a variance, do not select a label.) 24,000 books Revenues Cost of goods sold Production-volume variance Net cost of goods sold Gross margin More info Requirements 1. Calculate expected gross margin if Leslie produces 24,000, 30,000, or 36,000 books. (Make sure you include the production-volume variance as part of cost of goods sold.) 2. Calculate ending inventory in units and in dollars for each production level. 3. Managers who are paid a bonus that is a function of gross margin may be inspired to produce a product in excess of demand to maximize their own bonus. There are metrics to discourage managers from producing products in excess of demand. Do you think the following metrics will accomplish this objective? Show your work. a. Incorporate a charge of 10% of the cost of the ending inventory as an expense for evaluating the manager. b. Include nonfinancial measures when evaluating management and rewarding performance. Estimated sales Beginning inventory Average selling price Variable production costs Fixed production costs 24,000 books 0 books $84 per book $52 per book $432,000 per semester The fixed-cost allocation rate is based on expected sales and is therefore equal to $432,000 + 24,000 books = $18 per book. Print Done