Question

Jordan Manufacturing Co. expects to make 31,000 chairs during the year 1 accounting period. The company made 5,100 chairs in January. Materials and labor costs for January were $16,700 and $25,700, respectively. Jordan produced 2,400 chairs in February. Material and labor costs for February were $9,600 and $13,800, respectively. The company paid the $248,000 annual rental fee on its manufacturing facility on January 1, year 1. Required Assuming that Jordan desires to sell its chairs for cost plus 50 percent of cost, what price should be charged for the chairs produced in January and February? (Round intermediate calculations and final answers to 2 decimal places.) January February Price per unit

Answer 1

Jordan Manufachsing Co. tormula to be used in the question * Total Cost = Material + Labour + Overhead Cost * Total value of e goods - Total Cost + Profit - * Price per unit - Total Value Quantity Produced / sold We have been given Material & habour the particular Mouth, hence we will the Overhead rate per unit as follows: cost for determore Overhead Rate - fee Total Annual Rental Production (Total) $ 2,48,00 31,00 = $ 8 per Chair

the total cost for the Now we will month of calculate January labour t overhead Cost + Toteel Cost - Material - $ 16,700 t $25,700 + (slor = $83,2001- Profit (Targeted) = 50% of Cost = 50 X $83,200 = $ 41,6001- Cost (Total) + Profit (desired) Total Value of goods - = $83,200+ $41,600 = $124, 000/- for PRICE PER CHAIR the Month of = $124, doo Total Value Quantity produced y sold SIO - JANUARY $24.47 per Chair

for February : Total Cost = $9600+ $13,000 + ($8x2400) $42, 600/- Targeted ( Resised Proft = $42,600 x 50 = $21,3001- Total Value = $42, Geot $21,300 = $ 63,900 - . Price per Chave for the Month of FEBRUARY $ 63,90 - 2400 $26.63 por Chais Summary January February Price per unit 24.47 26.63
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