Grand Yachts manufactures sailboats. Due to recessionary conditions which have significantly depressed sales, the company had to cut back production to levels significantly below the normal level of 500 units a year. In 2011, the company’s production resulted in the following amounts: Item Amount Number of boats Opening inventory…………………………………………………………40 Production………………………………………………………………..320 Sales………………………………………………………… …………(280) Ending inventory………………………………………………………….80 Standard costs per unit based on SOU units per year Raw materials…………………………………………………S 18,000/unit Production wages……………………………………………….37,000/unit Variable production overhead…………………………………..15,000/unit Fixed production overhead…………………………………….20,000Ainit Total production cost…………………………………………S 90,000/unit Opening inventory cost…………………………………………S 3,600,000 Sales……………………………………………………………542,000,000 Actual amounts of variable and fixed costs were not materially different from standard costs. Required: Determine the amount of cost that should be included in inventories and the gross profit for the year. Grand Yachts uses the first-in, first-out cost flow assumption. View Solution:Grand Yachts manufactures sailboats Due to recessionary conditions which have