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Convex Mechanical Supplies produces a product with the following costs as of July 1, 20X1:
Material
$ 5
Labor
3
Overhead
2
$ 10
Beginning inventory at these costs on July 1 was 6,700 units. From July 1 to December 1, Convex produced 18,000 units. These units had a material cost of $7 per unit. The costs for labor and overhead were the same. Convex uses FIFO inventory accounting.
a. Assuming that Convex sold 20,000 units during the last six months of the year at $14 each, what would gross profit be?
b. What is the value of ending inventory?
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