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How do you find out the company gross margin

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Question - Baker Manufacturing uses a job order cost system, and overhead is applied on the basis of direct labor hours. At the beginning of the period, the company estimated that overhead would be $32,000 and 10,000 direct labor hours would be worked. Two projects were started and completed in the current accounting period. The following transactions were completed during the period:

(a) Used $5,000 of direct material on Project I and $3,400 of direct material on Project II.

(b) Labor costs for the two jobs amounted to the following: Project I, $12,000 (2,000 hours); Project II, $22,000 (6,000 hours).

(c) Project II was sold during the period for $60,000.

The company's gross margin for the period was $15,400.

How do you find out that the company's gross margin was $15,400?

Reference no: EM132195467

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