Gusteau's manufactures high-quality boxes of flavored seltzer which it sells for $14 per box. Below is some information related to Gusteau's capacity and budgeted fixed manufacturing costs for 2019: Denominator-Level Capacity Concept Theoretical Capacity Practical Capacity Normal Capacity Master Budget Capacity Budgeted Fixed Period Manufacturing Overhead per $1,750,000 $1,750,000 $1,750,000 $1,750,000 Production Production per Period 362 310 Days of 310 310 22 16 16 Hours of 16 per Day Boxes per Hour 300 250 175 200 Production during 2019 was 990,000 boxes of flavored seltzer, with 15,000 remaining in ending inventory at 12/31/19. Assume beginning inventory is zero. Variable manufacturing costs were $1.78 per unit (there are no variable cost variances). Actual fixed manufacturing overhead costs were $1,750,000, the same as budgeted. Fixed manufacturing overhead cost variances are written off to cost of goods sold in the period in which they occur. (Note: Round interim calculations to 2 decimal places.) What is the gross margin under normal capacity?

Gusteau's manufactures high-quality boxes of flavored seltzer which it sells for $14 per box. Below is some information related to Gusteau's capacity and budgeted fixed manufacturing costs for 2019: Denominator-Level Capacity Concept Theoretical Capacity Practical Capacity Normal Capacity Master Budget Capacity Budgeted Fixed Period Manufacturing Overhead per $1,750,000 $1,750,000 $1,750,000 $1,750,000 Production Production per Period 362 310 Days of 310 310 22 16 16 Hours of 16 per Day Boxes per Hour 300 250 175 200 Production during 2019 was 990,000 boxes of flavored seltzer, with 15,000 remaining in ending inventory at 12/31/19. Assume beginning inventory is zero. Variable manufacturing costs were $1.78 per unit (there are no variable cost variances). Actual fixed manufacturing overhead costs were $1,750,000, the same as budgeted. Fixed manufacturing overhead cost variances are written off to cost of goods sold in the period in which they occur. (Note: Round interim calculations to 2 decimal places.) What is the gross margin under normal capacity?

FINANCIAL ACCOUNTING

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Chapter1: Financial Statements And Business Decisions

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Concept explainers

Master Budget

A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.

Sales Budget and Selling

A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.

Question

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Gusteau's manufactures high-quality boxes of flavored seltzer which it sells for $14 per box.
Below is some information related to Gusteau's capacity and budgeted fixed manufacturing costs for 2019:
Budgeted Fixed Days of Hours of
Denominator-Level
W
Capacity Concept
Theoretical Capacity
Practical Capacity
Normal Capacity
Master Budget Capacity
$10,187,250
$10,194,980
#
3
E
$
Help Center?
Period
4
Manufacturing
Overhead per
$1,750,000
$1,750,000
$1,750,000
$1,750,000
R
Production Production
%
5
per Period
T
362
310
310
310
Production during 2019 was 990,000 boxes of flavored seltzer, with 15,000 remaining in ending inventory at 12/31/19. Assume beginning
inventory is zero.
22
Variable manufacturing costs were $1.78 per unit (there are no variable cost variances).
Actual fixed manufacturing overhead costs were $1,750,000, the same as budgeted. Fixed manufacturing overhead cost variances are written
off to cost of goods sold in the period in which they occur. (Note: Round interim calculations to 2 decimal places.)
What is the gross margin under normal capacity?
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300
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