Estimated sales22,000 booksBeginning inventory0 booksAverage selling price$82 per bookVariable production costs$45 per bookFixed production costs$396,000 per semesterThe fixed-cost allocation rate is based on expected sales and istherefore equal to $396,000 22,000 books = $18 per book. Academia Press produces textbooks for high school accounting courses. The company recently hired a new editor, Billie Green, to handle production and sales ofbooks for an introductory accounting course. Billie's compensation depends on the gross margin associated with sales of this book. Billie needs to decide how manycopies of the book to produce. The following information is available for the fall semester 2020:(Click the icon to view the information.)Billie has decided to produce either 22,000, 27,500, or 29,700 books.Read the requirements.Requirement 1. Calculate expected gross margin if Billie produces 22,000, 27,500, or 29,700 books. (Make sure you include the production-volume variance as part ofcost of goods sold.)Calculate the gross margin for each level of production. Begin with 22,000 books, then 27,500 books, and lastly 29,700 books. (Enter a "0" for any zero balanceaccounts. If an account does not have a variance, do not select a label.)22,000 booksRevenuesCost of goods soldProduction-volume varianceNet cost of goods soldGross margin

Gross margin refers to the profit before period costs. It is computed by subtracting the direct and…

Answered: Academia Press produces textbooks for…

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter8: Depreciation, Cost Recovery, Amortization, And Depletion

Section: Chapter Questions

Problem 44P

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