Homework Answers
(a) Computation of the markup on absorption cost -
markup on absorption cost = [required return on investment*investment) + SG&A expenses]/(unit sales*unit product cost)
SG & A expenses = 5 + $ 120000/30000 units
= 5 + 4
= $ 9
Unit sales = 30000 units
unit product cost under absorption costing = Direct material + direct labor + variable manufacturing overhead + fixed manufacturing overhead
= 6 + 5 + 4 + 360000/30000
= 15 + 12
= 27
mark up on absorption costing = [600000*15% + 270000]/(30000*27)
= (90000 + 270000)/(30000*27)
= 360000/(30000*27)
= 360000/810000
= 44.44%
(b) Computation of Target selling price of the product using the absorption costing approach -
Target selling price = product cost under absorption costing*mark up on absorption costing
= 27 + 27*44.44%
= 27 + 12 (approx)
= $ 39
Selling & general administrative costs are not included in the cost base instead the mark up is supposed to cover these expenses.
please check with your answer and let me know.
Add Answer to:
Q1. (25 marks) Revelstoke Corporation manufactures a product that has the following costs: Per unit Per...
B U А. А 01 mark) Revelstoke Corporation manufactures product that has the following Per year...
B U А. А 01 mark) Revelstoke Corporation manufactures product that has the following Per year Per unit WOD 5.00 4.00 Direct materials Direct labour Variable manufacturing overhead Fixed manufacturing overhead Variable SG&A expenses Fixed S&A expenses 5360.000 5.00 120.000 The company uses the absorption costing approach to cost.plus pricing. The pricing calculations are based on budgeted production and sales of 30,000 units per year, The company has invested 5600,000 in this product and expects a return on investment of...
Quamma Corporation makes a product that has the following costs: PerYear Direct materials Direct labor Variable...
Quamma Corporation makes a product that has the following costs: PerYear Direct materials Direct labor Variable manufacturing Overhead Fixed manufacturing overhead Variable selling and administrative expenses Fixed selling and administrative expenses Per Unit $17.20 $14.80 $ 2.10 $802,800 $ 3.80 $561.000 The company uses the absorption costing approach to cost-plus pricing as described in the text. The pricing calculations are based on budgeted production and sales of 36,000 units per year. The company has invested $610,000 in this product and...
Kirgan, Inc., manufactures a product with the following costs: Per Year Per Unit $26.40 $15.40 $...
Kirgan, Inc., manufactures a product with the following costs: Per Year Per Unit $26.40 $15.40 $ 3.60 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses Fixed selling and administrative expenses $1,545,600 $ 3.50 $1,514,700 The company uses the absorption costing approach to cost-plus pricing described in the text. The pricing calculations are based on budgeted production and sales of 96,000 units per year. The company has invested $370,000 in this product and expects...
Exercise 19-11 Pricing with Absorption Costing $100 $30 Calculate absorption cost per unit: Direct materials Direct...
Exercise 19-11 Pricing with Absorption Costing $100 $30 Calculate absorption cost per unit: Direct materials Direct labor Variable overhead Fixed overhead Total Absorption Cost per unit $8 $12 600,000/50,000 $150 $60 Target Selling price per unit: Absorption Cost per unit $150 Target Selling price per unit $210 Exercise 19-11 Absorption costing and product pricing @P4 Sirhuds Inc., a maker of smartwatches, reports the information below on its product. The company uses absorption costing and has a target markup of 40%...
Morales Corporation produces microwave ovens. The following per unit cost information is available: direct materials $35,...
Morales Corporation produces microwave ovens. The following per unit cost information is available: direct materials $35, direct labor $24, variable manufacturing overhead $18, fed manufacturing overhead $52, variable selling and administrative expenses $13, and selling and administrative expenses $27. is desired ROI per unit is $20. Compute the marke percentage using variable cost pricing. (Round answer to decimal place 10.S .) Markup percentage 59 Kaspar Corporation makes a commercial-grade cooking griddle. The following information is available for Kaspar Corporation's anticipated...
Rap Corporation produces outdoor portable fireplace units. The following per unit cost information is available: direct...
Rap Corporation produces outdoor portable fireplace units. The following per unit cost information is available: direct materials $16, direct labor $22, variable manufacturing overhead $12, fixed manufacturing overhead $30, variable selling and administrative expenses $10, and fixed selling and administrative expenses $21. The company's ROI per unit is $9. x Your answer is incorrect. Try again. Compute Rap Corporation's markup percentage using absorption-cost pricing. Absorption-cost pricing markup percentage '92|| x Your answer is incorrect. Try again. Compute Rap Corporation's markup...
value: 4.00 points Lynch Company manufactures and sells a single product. The following costs were incurred...
value: 4.00 points Lynch Company manufactures and sells a single product. The following costs were incurred during the company's first year of operations: Variable costs per unit: Manufacturing: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative $ $ $ $ 13 7 1 1 $ 288,000 $ 198,000 During the year, the company produced 24,000 units and sold 20,000 units. The selling price of the company's...
Variable vs. Absorption Costing $ 50.00 No Video for this worksheet Selling price per unit Manufacturing...
Variable vs. Absorption Costing $ 50.00 No Video for this worksheet Selling price per unit Manufacturing costs Variable per unit produced: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead per year $ 11.00 REQUIRED: Calculate the unit cost and prepare a traditional 6.00 $ 3.00 120,000 Selling and administrative expenses Variable per unit sold Fixed per year $ 4.00 70,000 Year 1 Units in beginning inventory Units produced during the year Units sold during the year Units in...
Lynch Company manufactures and sells a single product. The following costs were incurred during the company's...
Lynch Company manufactures and sells a single product. The following costs were incurred during the company's first year of operations: Variable costs per unit: Manufacturing: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative $ 300,000 $ 190,000 During the year, the company produced 25,000 units and sold 20,000 units. The selling price of the company's product is $50 per unit. Required: 1. Assume that the company...
Baxtell Company manufactures and sells a single product. The following costs were incurred during the company's...
Baxtell Company manufactures and sells a single product. The following costs were incurred during the company's first year of operations: Variable costs per unit: Manufacturing: Direct materials Direct labour Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expense 276,300 133.000 During the year, the company produced 30,700 units and sold 26,600 units. The selling price of the company's product is $70 per unit. Required: 1. Assume that the company uses...
B U А. А 01 mark) Revelstoke Corporation manufactures product that has the following Per year Per unit WOD 5.00 4.00 Direct materials Direct labour Variable manufacturing overhead Fixed manufacturing overhead Variable SG&A expenses Fixed S&A expenses 5360.000 5.00 120.000 The company uses the absorption costing approach to cost.plus pricing. The pricing calculations are based on budgeted production and sales of 30,000 units per year, The company has invested 5600,000 in this product and expects a return on investment of...
Quamma Corporation makes a product that has the following costs: PerYear Direct materials Direct labor Variable manufacturing Overhead Fixed manufacturing overhead Variable selling and administrative expenses Fixed selling and administrative expenses Per Unit $17.20 $14.80 $ 2.10 $802,800 $ 3.80 $561.000 The company uses the absorption costing approach to cost-plus pricing as described in the text. The pricing calculations are based on budgeted production and sales of 36,000 units per year. The company has invested $610,000 in this product and...
Kirgan, Inc., manufactures a product with the following costs: Per Year Per Unit $26.40 $15.40 $ 3.60 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses Fixed selling and administrative expenses $1,545,600 $ 3.50 $1,514,700 The company uses the absorption costing approach to cost-plus pricing described in the text. The pricing calculations are based on budgeted production and sales of 96,000 units per year. The company has invested $370,000 in this product and expects...
Exercise 19-11 Pricing with Absorption Costing $100 $30 Calculate absorption cost per unit: Direct materials Direct labor Variable overhead Fixed overhead Total Absorption Cost per unit $8 $12 600,000/50,000 $150 $60 Target Selling price per unit: Absorption Cost per unit $150 Target Selling price per unit $210 Exercise 19-11 Absorption costing and product pricing @P4 Sirhuds Inc., a maker of smartwatches, reports the information below on its product. The company uses absorption costing and has a target markup of 40%...
Morales Corporation produces microwave ovens. The following per unit cost information is available: direct materials $35, direct labor $24, variable manufacturing overhead $18, fed manufacturing overhead $52, variable selling and administrative expenses $13, and selling and administrative expenses $27. is desired ROI per unit is $20. Compute the marke percentage using variable cost pricing. (Round answer to decimal place 10.S .) Markup percentage 59 Kaspar Corporation makes a commercial-grade cooking griddle. The following information is available for Kaspar Corporation's anticipated...
Rap Corporation produces outdoor portable fireplace units. The following per unit cost information is available: direct materials $16, direct labor $22, variable manufacturing overhead $12, fixed manufacturing overhead $30, variable selling and administrative expenses $10, and fixed selling and administrative expenses $21. The company's ROI per unit is $9. x Your answer is incorrect. Try again. Compute Rap Corporation's markup percentage using absorption-cost pricing. Absorption-cost pricing markup percentage '92|| x Your answer is incorrect. Try again. Compute Rap Corporation's markup...
value: 4.00 points Lynch Company manufactures and sells a single product. The following costs were incurred during the company's first year of operations: Variable costs per unit: Manufacturing: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative $ $ $ $ 13 7 1 1 $ 288,000 $ 198,000 During the year, the company produced 24,000 units and sold 20,000 units. The selling price of the company's...
Variable vs. Absorption Costing $ 50.00 No Video for this worksheet Selling price per unit Manufacturing costs Variable per unit produced: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead per year $ 11.00 REQUIRED: Calculate the unit cost and prepare a traditional 6.00 $ 3.00 120,000 Selling and administrative expenses Variable per unit sold Fixed per year $ 4.00 70,000 Year 1 Units in beginning inventory Units produced during the year Units sold during the year Units in...
Lynch Company manufactures and sells a single product. The following costs were incurred during the company's first year of operations: Variable costs per unit: Manufacturing: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative $ 300,000 $ 190,000 During the year, the company produced 25,000 units and sold 20,000 units. The selling price of the company's product is $50 per unit. Required: 1. Assume that the company...
Baxtell Company manufactures and sells a single product. The following costs were incurred during the company's first year of operations: Variable costs per unit: Manufacturing: Direct materials Direct labour Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expense 276,300 133.000 During the year, the company produced 30,700 units and sold 26,600 units. The selling price of the company's product is $70 per unit. Required: 1. Assume that the company uses...
Most questions answered within 3 hours.
-
Describe two obstacles that makes fixing atmospheric nitrogen
difficult.
asked 3 minutes ago -
T
F 53) Most differences
between human groups are the result of biology rather than
culture....
asked 7 minutes ago -
A 5.20 mW helium neon laser emits a visible laser beam with a
wavelength of 633...
asked 10 minutes ago -
Assignment:
Your
organization has made a strategic decision
to
outsourcework
currently performed in house. You have...
asked 9 minutes ago -
A hospital performs 100 surgeries per week. The probability that
complications after surgery occur is 10%....
asked 10 minutes ago -
In preparing its cash flow statement for the year ended December
31, 2018, Green Co. gathered...
asked 12 minutes ago -
Donna is 18 years old and full time accounting student.She is
saving for an overseas holiday...
asked 12 minutes ago -
Service-oriented architectures (SOA) provide
object-oriented architectures for web platforms that represent a
collection of services. SOA...
asked 13 minutes ago -
Le Terroir Winery is considering an expansion project to produce
fine wines. The trial expansion will...
asked 22 minutes ago -
The Bahraini public budget experiences deficit in the last
seven years, what are procedures are taken...
asked 29 minutes ago -
You invested $30,000 in a mutual fund at the beginning of the
year when the NAV...
asked 32 minutes ago -
Would you expect the price elasticity of supply for guitars to
be more inelastic in the...
asked 34 minutes ago