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17 January, 05:00

Sully Company provided the following information for last month. Production in units 3,000 Direct materials cost $7,000 Direct labor cost $10,000 Overhead cost $9,600 Sales commission per unit sold $4 Price per unit sold $29 Fixed selling and administrative expense $7,000 There were no beginning and ending inventories. What is gross margin for Sully Company last month? a.$54,000 b.$47,400 c.$32,400 d.$60,400 e.$64,600

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  1. 17 January, 05:04
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    d.$60,400

    Explanation:

    The computation of the gross margin is shown below:

    = Sales - Direct materials cost - Direct labor cost - Overhead cost

    where,

    Sales = 3,000 units * $29 = $87,000

    And all the other items would remain the same

    Now put these values to the above formula

    So, the value would equal to

    = $87,000 - $7,000 - $10,000 - $9,600

    = $60,400
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