Question

Product Pricing Two Products Quality Data manufactures two products, CDs and DVDs, both on the same assembly lines and predicted costs for the year 2009 are as follows: Variable Costs find Costs Matera 200.000 600.000 Other 50.000 600.000 10 disks per pack. The predicted sales are 100.000 packs of CDs and 500.000 pads of DVDs The Each product uses 50 percent of the materials costs. Based on manufacturing time, 40 percent of the other costs are signed to the cosando percent of the other costs are a management of Quality Data desires an annual profit of $50,000 nd to the Ovos. The (a) What price should Quality Data charge for each disk pack if management believes the DVDs sell for 20 percent more than the CDs Round answers to the nearest cent. CDs (10,000) DVDs $2.28 (b) What is the total profit per product using the sens prices determined in partta CDs 0 x egative signs with answers, if appropriate. DVD 0 Check

Answer 1

solution working Note: 1 computation of DUDS DUDS un the total cost of cos and mum Particolars CD DVD Total $1.00.000 $1.00000 $ 200.000 variable costs Materials Other (3.50,000 X 40%,60%) Total variable Cast - ) $1,40,000 $2,0.000 $3.50,000 $2.40.000 $3110.000 8550.000 Filed costs Materials $3.00.000 $300,000 $6,00,000 other 600.000X40% 60%.] $9,40,000 $3,60.000 $60.000 Total fixed costs-N) $5,60.000 $6.60.000 $12,00.000 Total cost Citii) 780.000 89.70.000 450.000

the total cost to manufacture 4,00.000 CDs - $7,80.000 the total cost to manufacture 5,00.000 DUR'S = $9.40.000 calcolation of the selling Price per pack of CD and DUD as shown below mm assume that the selling Price of cobe x then selling Price af DVD be the = 1.22 • Profit - Salls E) Total cost $50.000 = (4.00.000 X1 ) 500,000x192) - 17,50.000 $ 50.000 + 14,50,000 do 4.00,000 x + 600.0001 $19.00.000 - 10.00.000 X te $ 18,00.000 818 10,00.000 so the selling Price of co is $1.8 and the selling Price of Dugis = $1,881.2 = $2.16

computation of total profit per product muun mu v DVD 500000 Tokel 9.00.000 $2.16 Particular CD @Estimated sals 4,00.000 Cin facts Destimated selling Price $1.8 Per Pack ① salll revenue $7,20.000 (C= @6) @ Total costs $ 7,80.000 @ Profit ($ 60,000) (C-d) $10,80,000 $18,00000 $9.70.00 $ ,50 AD $1,10.000 $50.000 So. Total Bofit for co is $60,000 LOSS Total Profit fan DUD IN $110.000