AVA assembles cars and its components cost $22,000, direct labour for the assembly is $1,200,...
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AVA assembles cars and its components cost $22,000, direct labour for the assembly is $1,200, variable manufacturing overhead is $400 per car and fixed manufacturing overhead is $10,000 per month. AVA has one car in inventory at the beginning of the year at a full absorption cost of $26,000 and three cars in inventory at the end of the year. AVA expects to assemble 48 cars per year. However, they produce 52 cars without increasing fixed manufacturing overhead. Each is sold at $39,000. What is AVAs gross profit per car? What is AVAs total gross profit?
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