Question

Ence Sales, Inc., a merchandising company, reported sales of 6,400 units in April at a selling price of $684 per unit. Cost of goods sold, which is a variable cost, was $455 per unit. Variable selling expenses were $30 per unit and variable administrative expenses were $40 per unit. The total fixed selling expenses were $156,800 and the total administrative expenses were $260,400. The gross margin for April was: $1,465,600 $3,960,400 $1,017,600 $600,400

Answer 1

Gross Margin 1,465,600

Step-by-step explanation:

gross margin: sales - COGS

sales 6,400 units at 684 = 4,377,600

cost of goods sold 455 = (2,912,000)

Gross Margin 1,465,600

The selling and administrative cost are cost of the period, are not capitalized through inventory.