Jordan Inc. manufactures Product B, incurring variable product costs of $15.00 per unit and fixed product...
Jordan Inc. manufactures Product B, incurring variable product costs of $15.00 per unit and fixed product costs of $70,000. Total Selling and Administrative Expenses for the year are expected to be $15,700. Jordan desires a profit equal to a 10% rate of return on assets, $785,000 of assets are devoted to producing Product B, and 100,000 units are expected to be produced and sold.
Compute the markup percentage, using the product cost concept.
Compute the normal selling price of Product B.
Homework Answers
Answer 1:
Required Return:
Jordan desires a profit equal to a 10% rate of return on assets.
Value of assets that are devoted to producing Product B = $785,000
Required return = 785000 * 10% = $78,500
Product costs For 100,000 units:
Variable product costs = 100000 * $15 = $1,500,000
Fixed product costs = $70,000
Product cost = $1,570,000
Markup percentage:
Selling and Administrative Expenses = $15,700
Return/Profit required = $78,500
Markup percentage over product cost has to cover both 'Selling and Administrative Expenses' and 'profit required'
Markup percentage = (15700 + 78500) / 1570000 = 6%
The markup percentage, using the product cost concept = 6%
Answer 2:
Sale value for 100,000 units = Product costs + Selling and Administrative Expenses + Return required
= 1570000 + 15700 + 78500
= $1,664,200
Selling price of Product B = 1,664,200 / 100000 = $16.642
Selling price of Product B = $16.642 or $16.64
Add Answer to:
Jordan Inc. manufactures Product B, incurring variable product
costs of $15.00 per unit and fixed product...
Product Cost Concept of Product Costing MyPhone Inc. uses the product cost concept of applying the...
Product Cost Concept of Product Costing MyPhone Inc. uses the product cost concept of applying the cost-plus approach to product pricing. The costs of producing and selling 5,000 cellular phones are as follows: Variable costs: Fixed costs: Direct materials $89 per unit Factory overhead $199,600 Direct labor 37 Selling and administrative expenses 70,000 Factory overhead 24 Selling and administrative expenses 23 Total $173 per unit MyPhone wants a profit equal to a 15% rate of return on invested assets of...
Variable Cost Concept of Product Pricing Voice Com, Inc., produces and sells cellular phones. The costs...
Variable Cost Concept of Product Pricing Voice Com, Inc., produces and sells cellular phones. The costs of producing and selling 8,500 units of cellular phones are a Variable costs: Fixed costs: Direct materials $ 65 per unit Factory overhead $382,900 Selling and admin. exp. Direct labor 30 134,500 Factory overhead 20 Selling and admin. exp 15 $130 per unit Total Voice Com desires a profit equal to a 15% rate of return on invested assets of $455,000 Assume that Voice...
Product Cost Method of Product Pricing La Femme Accessories Inc. produces women's handbags. The cost of...
Product Cost Method of Product Pricing La Femme Accessories Inc. produces women's handbags. The cost of producing 1,130 handbags is as follows: Direct materials $15,700 Direct labor 8,100 Factory overhead 6,300 Total manufacturing cost $30,100 The selling and administrative expenses are $26,200. The management desires a profit equal to 17% of invested assets of $496,000. If required, round your answers to nearest whole number. a. Determine the amount of desired profit from the production and sale of 1,130 handbags. $...
Jordan Company incurs annual fixed costs of $89,515. Variable costs for Jordan’s product are $21.35 per...
Jordan Company incurs annual fixed costs of $89,515. Variable costs for Jordan’s product are $21.35 per unit, and the sales price is $35.00 per unit. Jordan desires to earn an annual profit of $62,000. Required Use the contribution margin ratio approach to determine the sales volume in dollars and units required to earn the desired profit. (Do not round intermediate calculations. Round your final answers to the nearest whole number.)
Product Cost Concept of Product Pricing Willis Products Inc. uses the product cost concept of applying...
Product Cost Concept of Product Pricing Willis Products Inc. uses the product cost concept of applying the cost-plus approach to product pricing. The costs of producing and selling 5,000 units of medical tablets are as follows: Variable costs per unit: Fixed costs: Direct materials $94 Factory overhead $160,000 Selling and admin. exp. Direct labor 34 55,000 Factory overhead 29 Selling and admin. exp. $180 Total Willis Products desires a profit equal to a 20% rate of return on invested assets...
Jordan Company incurs annual fixed costs of $145,600. Variable costs for Jordan's product are $27.00 per...
Jordan Company incurs annual fixed costs of $145,600. Variable costs for Jordan's product are $27.00 per unit, and the sales price is $45.00 per unit. Jordan desires to earn an annual profit of $56,000. Required Use the contribution margin ratio approach to determine the sales volume in dollars and units required to earn the desired profit. (Do not round intermediate calculations. Round your final answers to the nearest whole number.) Sales in dollars Sales volume in units
Bracey Company manufactures and sells one product. The following information pertains to the company’s first year of operations: Variable cost per unit: Direct materials $ 28 Fixed costs...
Bracey Company manufactures and sells one product. The following information pertains to the company’s first year of operations: Variable cost per unit: Direct materials $ 28 Fixed costs per year: Direct labor $ 367,500 Fixed manufacturing overhead $ 389,550 Fixed selling and administrative expenses $ 66,000 The company does not incur any variable manufacturing overhead costs or variable selling and administrative expenses. During its first year of operations, Bracey produced 24,500 units and sold 22,700 units. The selling price of...
Product Cost Method of Product Pricing La Femme Accessories Inc. produces women's handbags. The cost of...
Product Cost Method of Product Pricing La Femme Accessories Inc. produces women's handbags. The cost of producing 1,110 handbags is as follows: Direct materials Direct labor $15,700 7,000 5,800 Factory overhead Total manufacturing cost $28,500 The selling and administrative expenses are $27.500. The management desires a profit equal to 15% of invested assets of $501.000. Frequired, round your answers to nearest whole number a. Determine the amount of desired profit from the production and sale of 1.110 handbags b. Determine...
Smart Stream Inc. uses the variable cost concept of applying the cost-plus approach to product pricing....
Smart Stream Inc. uses the variable cost concept of applying the cost-plus approach to product pricing. The costs of producing and selling 10,000 cellular phones are as follows: Variable costs per unit: Fixed costs: Direct materials $150 Factory overhead $350,000 140,000 Direct labor 25 Selling and admin. exp. Factory overhead 40 Selling and administrative expenses 25 Total $240 Smart Stream desires a profit equal to a 30% rate of return on invested assets of $1,200,000. a. Determine the variable costs...
25 Smart Stream Inc. uses the variable cost concept of applying the cost-plus approach to product...
25 Smart Stream Inc. uses the variable cost concept of applying the cost-plus approach to product pricing. The costs of producing and selling 10,000 cellular phones are as follows: Variable costs per unit: Fixed costs: Direct materials $150 Factory overhead $350,000 Direct labor Selling and admin. exp. 140,000 Factory overhead 40 Selling and administrative expenses 25 Total $240 Smart Stream desires a profit equal to a 30% rate of return on invested assets of $1,200,000. a. Determine the variable costs...
Variable Cost Concept of Product Pricing Voice Com, Inc., produces and sells cellular phones. The costs of producing and selling 8,500 units of cellular phones are a Variable costs: Fixed costs: Direct materials $ 65 per unit Factory overhead $382,900 Selling and admin. exp. Direct labor 30 134,500 Factory overhead 20 Selling and admin. exp 15 $130 per unit Total Voice Com desires a profit equal to a 15% rate of return on invested assets of $455,000 Assume that Voice...
Product Cost Concept of Product Pricing Willis Products Inc. uses the product cost concept of applying the cost-plus approach to product pricing. The costs of producing and selling 5,000 units of medical tablets are as follows: Variable costs per unit: Fixed costs: Direct materials $94 Factory overhead $160,000 Selling and admin. exp. Direct labor 34 55,000 Factory overhead 29 Selling and admin. exp. $180 Total Willis Products desires a profit equal to a 20% rate of return on invested assets...
Jordan Company incurs annual fixed costs of $145,600. Variable costs for Jordan's product are $27.00 per unit, and the sales price is $45.00 per unit. Jordan desires to earn an annual profit of $56,000. Required Use the contribution margin ratio approach to determine the sales volume in dollars and units required to earn the desired profit. (Do not round intermediate calculations. Round your final answers to the nearest whole number.) Sales in dollars Sales volume in units
Product Cost Method of Product Pricing La Femme Accessories Inc. produces women's handbags. The cost of producing 1,110 handbags is as follows: Direct materials Direct labor $15,700 7,000 5,800 Factory overhead Total manufacturing cost $28,500 The selling and administrative expenses are $27.500. The management desires a profit equal to 15% of invested assets of $501.000. Frequired, round your answers to nearest whole number a. Determine the amount of desired profit from the production and sale of 1.110 handbags b. Determine...
Smart Stream Inc. uses the variable cost concept of applying the cost-plus approach to product pricing. The costs of producing and selling 10,000 cellular phones are as follows: Variable costs per unit: Fixed costs: Direct materials $150 Factory overhead $350,000 140,000 Direct labor 25 Selling and admin. exp. Factory overhead 40 Selling and administrative expenses 25 Total $240 Smart Stream desires a profit equal to a 30% rate of return on invested assets of $1,200,000. a. Determine the variable costs...
25 Smart Stream Inc. uses the variable cost concept of applying the cost-plus approach to product pricing. The costs of producing and selling 10,000 cellular phones are as follows: Variable costs per unit: Fixed costs: Direct materials $150 Factory overhead $350,000 Direct labor Selling and admin. exp. 140,000 Factory overhead 40 Selling and administrative expenses 25 Total $240 Smart Stream desires a profit equal to a 30% rate of return on invested assets of $1,200,000. a. Determine the variable costs...
Most questions answered within 3 hours.
-
A Chi-square distribution with 14 degrees of freedom is a
correct model for
Question 8 options:...
asked 6 seconds ago -
Try to get the code down to less than 40 lines. (PYTHON)
import random
fave_number =...
asked 2 minutes ago -
c. Node Admittance matrix and its use in different calculations
of power transmission system. Display the...
asked 2 minutes ago -
A) Suppose U=X∙Y3. Find X* and Y*.
B) Suppose U=X3∙Y. Find X* and Y*.
C) Suppose...
asked 5 minutes ago -
2.
Regression analysis was applied between sales (in $1,000) and
advertising (in $100), and the following...
asked 10 minutes ago -
I just took a final for chemistry 2. There were alot of
questions on cell potential....
asked 42 minutes ago -
A spherical weather balloon is filled with hydrogen until its
radius is 2.30 m. Its total...
asked 8 minutes ago -
Calculate the entropy change for the hypothetical process in
which 0.5 g of ice at 0°C...
asked 29 minutes ago -
When an airplane is flying 200 mph at 5000-ft altitude in a
standard atmosphere, the air...
asked 17 minutes ago -
Consider the economy of Freeland, whose overall actual price
index and actual output are P and...
asked 31 minutes ago -
Your car is worth considerably less money than you owe.
This is an example of the...
asked 29 minutes ago -
Which Asian police agency discussed in class does not have a
citizenship requirement for police officers?...
asked 22 minutes ago