QUESTION 1

1. Walker is the owner of Walker's Racers and expects sales of 9000 racers this period at a price of 95 per racer. His beginning finished good inventory includes 5000 racers from last period that each had a cost of $ 60. His desired finished goods ending inventory is 7000 racers. Each racers requires 1 wedge of direct material. He begins the period with 5000 wedges that cost $ 8 each. He desires 3000 wedges in ending inventory. Wedges purchased this period cost $ 10 each. Every racer requires 2 hours of labor at a rate of $ 12 per labor hour. MOH is assigned based on labor hours at a rate of $ 20 per labor hour. Beginning and ending WIP inventories are negligible; so treat as $0. These t-accts are provided to assist you as needed.

   Direct materials
   ?
   (c)	(d)
   ?

   WIP
   0
   (d)
   (e)
   (f)	(g)
   0

   Finished goods
   ?
   (g)	(j)
   (i)

   COGS
   (j)

   Calculate Walker's racer's gross margin?