Jenkins RV Sales Has Been Selling Large Recreational Vehicles for 20

question 27

Essay

Jenkins RV Sales has been selling large recreational vehicles for 20 years.On January 1,2015,the company had $4,630,000 in inventory (based on a FIFO valuation).While the number of recreational vehicles in Jenkins' inventory remained fairly constant throughout 2015,by December 31,2015 RV prices were 6% higher than at the beginning of the year.The company reported cost of goods sold for 2015 of $19,500,000.
Required:
Calculate the amount of realized holding gains in 2015 income for Jenkins RV Sales.

---

Definitions:

Variable Cost

Costs that vary directly with the level of production or output, including materials and labor expenses.

Incremental Manufacturing Cost

Additional costs incurred for manufacturing one more unit of a product.

Financial Reporting

The communication of financial information, such as balance sheets and income statements, to stakeholders to help in decision-making.

Contribution Margin

The differential between sales and variable costs, indicative of a product's profitability before fixed costs are subtracted.