Question

During 2017, Sandhill Furniture Company purchased wicker chairs. The manufacturer sells the chairs to Sandhill for a lump sum of $60,400. 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		400		$90
Armchairs		300		80
Straight chairs		700		50

During 2017, Sandhill sells 200 lounge chairs, 120 armchairs, and 130 straight chairs.

What is the amount of gross profit realized during 2017? What is the amount of inventory of unsold straight chairs on December 31, 2017? Round to 2 decimal places.

Gross profit realized during 2017?

Amount of inventory of unsold straight chairs?

Answer 1

		Sandhill Furniture Company
		Calculation of Cost per Chair
	(A)	(B)	(C )=(A)*(B)	(D )=(C )/95000	(E )	(F )=(D)*(E )	(G )=(F )/(A)
	Number of chairs	Selling Price per chair	Total Selling Price	Relative selling Price	Total cost price	Cost in percentage of relative selling price	Cost per chair
Lounge Chairs	400	$                               90.00	$               36,000.00	$                               0.38	$          60,400.00	$                  22,888.42	$                       57.22
Arm Chairs	300	$                               80.00	$               24,000.00	$                               0.25	$          60,400.00	$                  15,258.95	$                       50.86
Straight Chairs	700	$                               50.00	$               35,000.00	$                               0.37	$          60,400.00	$                  22,252.63	$                       31.79
Total			$               95,000.00
		Calculation of Gross Profit realized
	(A)	(B)	(C )=(A)*(B)	(D )	(E )=(A)*(D)	(F )=(C )-(E )
	Number of chairs sold	Selling Price per chair	Total Selling Price	Cost per chair	Total cost price	Gross Profit realized
Lounge Chairs	200	$                               90.00	$               18,000.00	$                             57.22	$          11,444.21	$                     6,555.79
Arm Chairs	120	$                               80.00	$                  9,600.00	$                             50.86	$            6,103.58	$                     3,496.42
Straight Chairs	130	$                               50.00	$                  6,500.00	$                             31.79	$            4,132.63	$                     2,367.37
Total			$               34,100.00			$                  12,419.58
	Gross Profit realized=	$                      12,419.58
	Amount of Inventory of unsold Straight chairs
	(A)	(B)	(C )=(A)-(B)	(D )	(C )*(D )
	Number of units purchased	Number of units sold	Inventory(Units)	Cost per chair	Inventory cost
	700	130	570	$                             31.79	18120