Academia Press produces textbooks for high school accounting courses. The company recently hired a new editor,...
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Academia Press produces textbooks for high school accounting courses. The company recently hired a new editor, Casie Green, to handle production and sales of books for an introductory accounting course. Casie's compensation depends on the gross margin associated with sales of this book. Casie 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.) Casie has decided to produce either 16,000, 20,000, or 24,800 books. Read the requirements. Requirement 1. Calculate expected gross margin if Casie produces 16,000, 20,000, or 24,800 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 20,000 books, and lastly 24,800 books. (Enter a "0" for any zero balance accounts. If an account does not have a variance, do not select a label.) More info - X Estimated sales 16,000 books Beginning inventory 0 books Average selling price $77 per book Variable production costs $48 per book Fixed production costs $400,000 per semester The fixed-cost allocation rate is based on expected sales and is therefore equal to $400,000+ 16,000 books = $25 per book. Academia Press produces textbooks for high school accounting courses. The company recently hired a new editor, Casie Green, to handle production and sales of books for an introductory accounting course. Casie's compensation depends on the gross margin associated with sales of this book. Casie 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.) Casie has decided to produce either 16,000, 20,000, or 24,800 books. Read the requirements. Requirement 1. Calculate expected gross margin if Casie produces 16,000, 20,000, or 24,800 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 20,000 books, and lastly 24,800 books. (Enter a "0" for any zero balance accounts. If an account does not have a variance, do not select a label.) More info - X Estimated sales 16,000 books Beginning inventory 0 books Average selling price $77 per book Variable production costs $48 per book Fixed production costs $400,000 per semester The fixed-cost allocation rate is based on expected sales and is therefore equal to $400,000+ 16,000 books = $25 per book.
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To calculate the expected gross margin for each level of production we need to consider the estimate... View the full answer
Related Book For
Horngrens Cost Accounting A Managerial Emphasis
ISBN: 978-0134475585
16th edition
Authors: Srikant M. Datar, Madhav V. Rajan
Posted Date:
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