Question

During 2020, Tamarisk Furniture Company purchases a carload of wicker chairs. The manufacturer sells the chairs to Tamarisk for a lump sum of $149,625 because it is discontinuing manufacturing operations and wishes to dispose of its entire stock. Three types of chairs are included in the carload. The three types and the estimated selling price for each are listed below.

Type		No. of Chairs		Estimated Selling Price Each
Lounge chairs		1,000		$90
Armchairs		750		80
Straight chairs		1,750		50

During 2020, Tamarisk sells 500 lounge chairs, 250 armchairs, and 300 straight chairs.

What is the amount of gross profit realized during 2020? What is the amount of inventory of unsold straight chairs on December 31, 2020? (Round cost per chair to 2 decimal places, e.g. 78.25 and final answer to 0 decimal places, e.g. 5,845.)

Gross profit realized during 2020		$enter a dollar amount
Amount of inventory of unsold straight chairs		$enter a dollar amount

Answer 1

Chairs	No. of Chairs	Sale price per chair	Total Sales Price	Percentage of Total Sales	Cost allocated to Chairs	Cost per Chair
					($149,625*Percentage of Total Sales)	Cost allocated to Chairs/No. of Chairs
Lounge Chairs	1000	$                          90	$                             90,000	37.89473684%	$                                               56,700	$                                               56.70
Arm Chairs	750	$                          80	$                             60,000	25.26315789%	$                                               37,800	$                                               50.40
Straight Chairs	1750	$                          50	$                             87,500	36.84210526%	$                                               55,125	$                                               31.50
Total			$                           237,500		$                                             149,625
Chairs	No. of Chairs Sold	Sale price per chair	Cost per Chair	Gross Profit Per Chair	Total Gross Profit
				(Sale price-Cost)Per Chair	(No. of Chairs*Gross Profit Per Chair)
Lounge Chairs	500	$                          90	$                               56.70	$                                      33.30	$                                               16,650
Arm Chairs	250	$                          80	$                               50.40	$                                      29.60	$                                                 7,400
Straight Chairs	300	$                          50	$                               31.50	$                                      18.50	$                                                 5,550
Total Gross Profit during 2020					$                                               29,600
Inventory of unsold Straight Chairs =(1750-300)*$31.50 =$45,675