[ldybrd]

Bradley Corp produces a product with the following costs as of July 1, 2007:

Material: $2 per unit; Labor $4 per unit: Overhead: $2 per unit

Beginnning inventory: at these costs on July 1st, was 3000 units.
From July 1 - Dec 1, 2007, Bradley produced 13,000 units.

These units had: Material: $3 per unit; Labor $5 per unit: Overhead: $3 per unit.

Bradley uses FIFO inventory accounting.

Assuming that Bradley sold 13,000 units during the last six months of the year @ $16 each,

What is the gross profit?

What is the value of the ending inventory?

[ms180sx]

using the first in first out method, 3000 units @ cost of $8, sold at 16 is $8 profit/unit (8 x 3000 is 24000.

the next 10K is made at $11, sold at 16, therefore 5/unit profit. (5 x 10000 = 50,000)

total profit should be A+B, or 24K+50K= 74000..

if bradley produced 3K, then 13K and sold 13K using fifo, 3K at second cost remains in inventory. 3K x 11/unit cost is 33000( COG)
if they sell at 16, potential is 48000.

double check what they value inventory as, either cog or income potential..

hope was helpful and correct.
-tim-