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Wilson Company Reported the Following Information About the Production and Sales

question 79

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Wilson Company reported the following information about the production and sales of its only product during its first month of operations:  Sales ( $225 per unit)  $360,000 Direct materials used $176,000 Direct labor $100,000 Variable factory overhead $44,000 Fixed factory overhead $80,000 Variable selling and administrative $20,000 expenses  Fixed s elling and administrative expenses $10,000 Endinginventories: Direct materials 0 WIP 0 Finished goods 400 units \begin{array} { l l } \text { Sales ( } \$ 225 \text { per unit) } & \$ 360,000 \\\text { Direct materials used } & \$ 176,000 \\\text { Direct labor } & \$ 100,000 \\\text { Variable factory overhead } & \$ 44,000 \\\text { Fixed factory overhead } & \$ 80,000 \\\text { Variable selling and administrative } & \$ 20,000 \\\text { expenses } & \\\text { Fixed s elling and administrative expenses } & \$ 10,000 \\\text { Endinginventories: Direct materials } & - 0 - \\\text { WIP } & - 0 -\\\text { Finished goods }&400 \text { units }\end{array} The gross profit under absorption costing is:


Definitions:

Conversion Costs

Costs incurred in the process of converting raw materials into finished products, typically including direct labor and manufacturing overhead.

Assembly Labor's Wages

The earnings provided to employees who work specifically in assembling parts or products in a manufacturing process.

Raw Lumber

Unprocessed wood used as a base material in construction and manufacturing, typically sold in bulk or by the board foot.

Materials Cost Per Unit

The total cost of materials required to produce a single unit of product, including direct and sometimes indirect materials.

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