12) Jean Peck's Furniture manufactures tables for hospitality sector. It takes only bulk orders and each table is sold for $500 after negotiations. In the month of January, it manufactures 3,100 tables and sells 2,700 tables. Actual fixed costs are the same as the amount of fixed costs budgeted for the month.The following information is provided for the month of January:Variable manufacturing costs$130 per unitFixed manufacturing costs$105,000 per monthFixed Administrative expenses$30,000 per monthAt the end of the month Jean Peck's Furniture has an ending inventory of finished goods of 400 units. The company also incurs a sales commission of $13 per unit.What is the gross margin when using absorption costing? (Round any intermediary calculations to the nearest cent and your final answer to the nearest dollar.)A) $958,700B) $1,179,900C) $842,003D) $907,551Answer: Explanation: Total sales: $500 x 2,700 units = $1,350,000Total cost of goods sold: ($130 + ($105,000/ 3,100units) ) x 2,700 units = $442,449Gross margin under absorption costing: $1,350,000 - $442,449 = $907,551

D

Diff: 2Objective: 2AACSB: Application of knowledge

##### We have textbook solutions for you!

**The document you are viewing contains questions related to this textbook.**

**The document you are viewing contains questions related to this textbook.**

Expert Verified

13) Jean Peck's Furniture manufactures tables for hospitality sector. It takes only bulk orders and each table is sold for $500 after negotiations. In the month of January, it manufactures 3,000 tables and sells 2,600 tables. Actual fixed costs are the same as the amount of fixed costs budgeted for the month.The following information is provided for the month of January:Variable manufacturing costs$140 per unitFixed manufacturing costs$90,000 per monthFixed Administrative expenses$30,000 per monthAt the end of the month Jean Peck's Furniture has an ending inventory of finished goods of 400 units. The company also incurs a sales commission of $13 per unit.What is the operating income when using absorption costing? (Round any intermediary calculations to the nearest cent and your final answer to the nearest dollar.)

C

Diff: 3Objective: 2AACSB: Application of knowledge14) Speedy Supplies sells a product at a price of $150. It's variable manufactured cost is $30 and the variable marketing cost per unit is $17.50 with fixed cost per period of $60,000. What would be the change in operating income under variable costs if sales increase from 10,000 to 10,500 units?

B

Diff: 2Objective: 2AACSB: Application of knowledge