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Business
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Number of pages / Number of words: |
3 / 786 |
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The gross margin shown in the figure above is determined by multiplying Sales by 0.40. Manufacturing overhead is calculated by solving the following equation:
Since we know that 70% of the conversion cost is manufacturing overhead, the equation now becomes:
When solved this gives us conversion cost equal to $600,000 and manufacturing overhead equal to $420,000...
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Manufacturing overhead is calculated by solving the following equation:
Since we know that 70% of the conversion cost is manufacturing overhead, the equation now becomes:
When solved this gives us conversion cost equal to $600,000 and manufacturing overhead equal to $420,000. The cost of goods sold will be Sales minus Gross margin, which is $720,000...
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