Question

During 2020, Sandhill Furniture Company purchases a carload of wicker chairs. The manufacturer sells the chairs to Sandhill for a lump sum of $119,700 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		720		$90
Armchairs		540		80
Straight chairs		1,260		50

During 2020, Sandhill sells 400 lounge chairs, 200 armchairs, and 240 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

ANSWER

Working:

Type	No. of Chairs	Estimated Selling Price	Total Sales Value	Relative Sales Value	Total Cost	Allocated Cost	Cost per Chair
Lounge chairs	720	$                                 90.00	$                  64,800	0.378947368	$                              119,700	$             45,360	$               63.00
Armchairs	540	$                                 80.00	$                  43,200	0.252631579	$                              119,700	$             30,240	$               56.00
Straight chairs	1260	$                                 50.00	$                  63,000	0.368421053	$                              119,700	$             44,100	$               35.00
Total			$ 171,000			$ 119,700
Type	No. of Chairs Sold	Sales Price per Chair	Total Sales Value	Cost per Chair	Total Cost of Goods Sold	Gross Profit
Lounge chairs	400	$                                       90	$                  36,000	$                                  63	$                                  25,200	$             10,800
Armchairs	200	$                                       80	$                  16,000	$                                  56	$                                  11,200	$               4,800
Straight chairs	240	$                                       50	$                  12,000	$                                  35	$                                    8,400	$               3,600
Total			$                  64,000		$                                  44,800	$             19,200
Type	No. of Chairs	No. of Chairs Sold	Unsold Inventory	Cost per Chair	Unsold Inventory
Lounge chairs	720	400	320	$                            63.00	$                                  20,160
Armchairs	540	200	340	$                            56.00	$                                  19,040
Straight chairs	1260	240	1020	$                            35.00	$                                  35,700
Total					$                                  74,900

Answer:

Gross profit realized during 2020: $19200

Amount of inventory of unsold straight chairs: $74900

__________________________________

If you have any query or any Explanation please ask me in the comment box, i am here to helps you.please give me positive rating.

*****************THANK YOU*************