Convex Mechanical Supplies produces a product with the following costs as of July 1, 20X1: Material Labor Overhead $6 4 $12 Beginning inventory at these costs on July 1 was 5,000 units. From July 1 to December 1, Convex produced 15,000 units. These units had a material cost of $10 per unit. The costs for labor and overhead were the same. Convex uses FIFO inventory accounting. Assuming that Convex sold 17,000 units during the last six months of the year at $20 each, what would gross profit be? What is the value of ending inventory?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Hi, I need help with understanding the formulas in order to calculate these missing blanks. I need help understanding this. 

 

               
               
Material   $6          
Labor   4          
Overhead   2          
    $12          
Beginning inventory at these costs on July 1 was 5,000 units. From July 1 to December 1, Convex produced       
15,000 units. These units had a material cost of $10 per unit. The costs for labor and overhead were the same.       
Convex uses FIFO inventory accounting.            
Assuming that Convex sold 17,000 units during the last six months of the year at $20 each, what would gross profit be?     
What is the value of ending inventory?            
               

 

Convex Mechanical Supplies    
     
               
Sales              
Cost of goods sold:              
Old inventory:              
  Quantity (units)               
  Cost per unit               
Total    FORMULA          
New inventory:              
  Quantity (units)               
  Cost per unit               
Total    FORMULA          
Total cost of goods sold     FORMULA        
Gross profit      FORMULA        
               
Value of ending inventory:              
Beginning inventory   FORMULA          
+ Total production   FORMULA          
Total inventory available for sale   FORMULA          
– Cost of goods sold    FORMULA          
Ending inventory    FORMULA          
               
               
# Problem 4-14

**Objective:** C.O.G.S., Gross profit and ending inventory

- **Student Name:** [Blank]
- **Course Name:** [Blank]
- **Student ID:** [Blank]
- **Course Number:** [Blank]

Convex Mechanical Supplies produces a product with the following costs as of July 1, 20X1:

- Material: $6
- Labor: $4
- Overhead: $2

**Total:** $12

Beginning inventory at these costs on July 1 was 5,000 units. From July 1 to December 1, Convex produced 15,000 units. These units had a material cost of $10 per unit. The costs for labor and overhead were the same. Convex uses FIFO inventory accounting.

Assuming that Convex sold 17,000 units during the last six months of the year at $20 each, what would gross profit be? What is the value of ending inventory?

---

## Solution

**Problem 4-14 Instructions**

Enter cell references, data, and formulas to complete the table.

### Convex Mechanical Supplies

- **Sales:** [Blank]
- **Cost of goods sold:**
  - **Old inventory:**
    - **Quantity (units):** [Blank]
    - **Cost per unit:** [Blank]
    - **Total:** FORMULA
  - **New inventory:**
    - **Quantity (units):** [Blank]
    - **Cost per unit:** [Blank]
    - **Total:** FORMULA
- **Total cost of goods sold:** FORMULA
- **Gross profit:** FORMULA

**Value of ending inventory:**

- **Beginning inventory:** FORMULA
- **+ Total production:** FORMULA
- **Total inventory available for sale:** FORMULA
- **– Cost of goods sold:** FORMULA
- **Ending inventory:** FORMULA

**Note**: Cells highlighted in yellow are meant to be filled with appropriate data or results from formulas applied.
Transcribed Image Text:# Problem 4-14 **Objective:** C.O.G.S., Gross profit and ending inventory - **Student Name:** [Blank] - **Course Name:** [Blank] - **Student ID:** [Blank] - **Course Number:** [Blank] Convex Mechanical Supplies produces a product with the following costs as of July 1, 20X1: - Material: $6 - Labor: $4 - Overhead: $2 **Total:** $12 Beginning inventory at these costs on July 1 was 5,000 units. From July 1 to December 1, Convex produced 15,000 units. These units had a material cost of $10 per unit. The costs for labor and overhead were the same. Convex uses FIFO inventory accounting. Assuming that Convex sold 17,000 units during the last six months of the year at $20 each, what would gross profit be? What is the value of ending inventory? --- ## Solution **Problem 4-14 Instructions** Enter cell references, data, and formulas to complete the table. ### Convex Mechanical Supplies - **Sales:** [Blank] - **Cost of goods sold:** - **Old inventory:** - **Quantity (units):** [Blank] - **Cost per unit:** [Blank] - **Total:** FORMULA - **New inventory:** - **Quantity (units):** [Blank] - **Cost per unit:** [Blank] - **Total:** FORMULA - **Total cost of goods sold:** FORMULA - **Gross profit:** FORMULA **Value of ending inventory:** - **Beginning inventory:** FORMULA - **+ Total production:** FORMULA - **Total inventory available for sale:** FORMULA - **– Cost of goods sold:** FORMULA - **Ending inventory:** FORMULA **Note**: Cells highlighted in yellow are meant to be filled with appropriate data or results from formulas applied.
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