Given the costs you just calculated and recognized that the company typically sets its selling price at 130% of its product costs, what level of sales would Kevin have expected? What gross margin percentage would this generate? Kevin, the manager at Flint's Danishes, was excited to determine the company's profit this year. It was a break-out year for thecompany, especially after being selected to cater the World College Club Sports Athletes' Annual Meeting. The company was thrilled!The number and variety of danishes produced for that event alone doubled the company's sales for the year. Kevin knew the totalsales amount but had yet to determine the total COGS. He hoped that it would be low relative to sales. Here are the transactions andamounts Kevin found when gathering information for his COGS calculation.Transaction DescriptionAdvertisingFlour, eggs, sugarDepreciation on baking equipment and kitchenDelivery expenseWages (baking employees)Research and developmentUtilities for bakery spaceInvestment in mutual fundCash proceeds from loanWages (indirect labor)Salaries (executives and office staff)Amount$13,000262,00045,0008,800368,0005,20022,00058,00048,00042,000119,000Kevin was sure that not all of these amounts should be included in COGS but didn't know how to correctly sort them.

Cost accounting is one of useful branch of accounting. Under this, different type of costs are being…

Given the costs you just calculated and recognized that the company typically sets its selling price at 130% of its product costs, what level of sales would Kevin have expected? What gross margin percentage would this generate?

Given the costs you just calculated and recognized that the company typically sets its selling price at 130% of its product costs, what level of sales would Kevin have expected? What gross margin percentage would this generate?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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