Figure 2-16 a Small Engine Repair Shop Purchased Materials Costing

Multiple Choice

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