Beginning and ending inventories of materials


Problem: Last year Quest Company incurred the following costs:

Direct materials: $40,000
Direct labor 60,000
Overhead 90,000
Selling expenses 24,000
Administrative expenses 22,000

Quest produced and sold 2,000 units at a sales price of $125 each. Assume that beginning and ending inventories of materials, work in process, and finished goods were zero.

Gross Margin per-unit was?

a.$125

b.$7

c.$95

d.$30

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Accounting Basics: Beginning and ending inventories of materials
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