Figure 2-16 a Small Engine Repair Shop Purchased Materials Costing $9,000 in $9,000

Figure 2-16
A small engine repair shop purchased materials costing $9,000 in July. The beginning inventory of material parts was $4,500 and the ending inventory of material parts was $4,000. Payments for direct labor for July totaled $27,000, secretarial costs were $2,000, and overhead of $5,000 was incurred. In addition, $5,000 was spent on advertising and $2,000 for the franchise name. Revenue for July was $50,000.
-Refer to Figure 2-16. What is the gross margin for July?

A) $41,500
B) $43,500
C) $1,500
D) $8,500

Correct Answer:

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