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Question - Cox Corporation produces a product with the following costs as of July 1, 20XX:
Material $3 per unit
Labour 3 per unit
Overhead 1 per unit
Assuming Cox sold 14,400 units during the last six months of the year at $13 each, beginning inventory at these costs on July 1 was 3,350 units. From July 1 to December 31, 20XY, Cox produced 12,700 units. These units had a material cost of $2 per unit. The costs for labour and overhead were the same.
Required -
a. Assumed Cox Corportation used average cost inventory accounting, what would gross profit be?
b. Assumed Cox Corportation used average cost inventory accounting, what is the value of ending inventory?
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