Grand Yachts manufactures sailboats. Due to recessionary conditions which have significantly…

Grand Yachts manufactures sailboats. Due to recessionary conditions which have significantly depressed sales, the company had to cut back production to levels significantly below the normal level of 500 units a year. In 2011, the company’s production resulted in the following amounts: Item Amount Number of boats Opening inventory…………………………………………………………40 Production………………………………………………………………..320 Sales………………………………………………………… …………(280) Ending inventory………………………………………………………….80 Standard costs per unit based on SOU units per year Raw materials…………………………………………………S 18,000/unit Production wages……………………………………………….37,000/unit Variable production overhead…………………………………..15,000/unit Fixed production overhead…………………………………….20,000Ainit Total production cost…………………………………………S 90,000/unit Opening inventory cost…………………………………………S 3,600,000 Sales……………………………………………………………542,000,000 Actual amounts of variable and fixed costs were not materially different from standard costs. Required: Determine the amount of cost that should be included in inventories and the gross profit for the year. Grand Yachts uses the first-in, first-out cost flow assumption. View Solution:
Grand Yachts manufactures sailboats Due to recessionary conditions which have