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Question - Cox Corporation produces a product with the following costs as of July 1, 20XX:
Material $5 per unit
Labour 3 per unit
Overhead 1 per unit
Assuming Cox sold 14,800 units during the last six months of the year at $18 each, beginning inventory at these costs on July 1 was 3,450 units. From July 1 to December 31, 20XY, Cox produced 12,900 units. These units had a material cost of $4 per unit. The costs for labour and overhead were the same.
a. Assumed Cox Corporation used average cost inventory accounting, what would gross profit be?
b. Assumed Cox Corporation used average cost inventory accounting, what is the value of ending inventory?
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