Ruth, the owner of Crystal Clean, is planning for the next year. She uses the absorption method to determine the evaluation of employees and how much to increase their hourly wage. She has budgeted the following information:Variable operating expenses $4 per unitFixed operating expenses $211900 Variable manufacturing cost $11 per unitFixed manufacturing cost $253000 Units to be produced 25300 unitsUnit selling price $31 per unit Year 1 Year 2Beginning inventory (units) 0 1400Actual production (units) 23800 25800Sales volume (units) 22400 26500There were no price or efficiency variances for either year. Ruth writes off any fixed MOH volume variance directly to COGS. Calculate the gross margin for year 1.A. $204800B. $222400C. $470400D. $209000. Ruth, the owner of Crystal Clean, is planning for the next year. She uses the absorption method to determine the evaluation ofemployees and how much to increase their hourly wage. She has budgeted the following information:Variable operating expensesFixed operating expensesVariable manufacturing costFixed manufacturing costUnits to be producedUnit selling priceBeginning inventory (units)Actual production (units)Sales volume (units)$211900$11 per unit$253000$4 per unit25300 units$31 per unitYear 102380022400Year 214002580026500There were no price or efficiency variances for either year. Ruth writes off any fixed MOH volume variance directly to COGS. Calculatethe gross margin for year 1.

The gross margin is computed by deducting the cost of goods sold from the sales value. Under…

Answered: Ruth, the owner of Crystal Clean, is…

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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Ruth, the owner of Crystal Clean, is planning for the next year. She uses the absorption method to determine the evaluation of employees and how much to increase their hourly wage. She has budgeted the following information:

Variable operating expenses $4 per unit
Fixed operating expenses $211900
Variable manufacturing cost $11 per unit
Fixed manufacturing cost $253000
Units to be produced 25300 units
Unit selling price $31 per unit

Year 1 Year 2

Beginning inventory (units) 0 1400

Actual production (units) 23800 25800

Sales volume (units) 22400 26500

There were no price or efficiency variances for either year. Ruth writes off any fixed MOH volume variance directly to COGS. Calculate the gross margin for year 1.

A. $204800
B. $222400
C. $470400
D. $209000.

Ruth, the owner of Crystal Clean, is planning for the next year. She uses the absorption method to determine the evaluation of
employees and how much to increase their hourly wage. She has budgeted the following information:
Variable operating expenses
Fixed operating expenses
Variable manufacturing cost
Fixed manufacturing cost
Units to be produced
Unit selling price
Beginning inventory (units)
Actual production (units)
Sales volume (units)
$211900
$11 per unit
$253000
$4 per unit
25300 units
$31 per unit
Year 1
0
23800
22400
Year 2
1400
25800
26500
There were no price or efficiency variances for either year. Ruth writes off any fixed MOH volume variance directly to COGS. Calculate
the gross margin for year 1.

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