3 DeeCees Pharmaceutical Company repacks medication tablets and distributes the products to pharmacies throughout Malaysia. The management accountant prices the product at cost-plus but realizes that the recent KPI (key performance index) incentives would call for a different pricing of those products, so that only controllable costs are included. The following related information is provided. Materials per package RM100.00 Direct labour per hour RM20.00 Manufacturing overheads RM30.00 Administrative and distribution expenses RM25.00 Each package takes about 10 minutes to complete packing. The management accountant estimates that 40% of the manufacturing overheads and administrative and distribution expenses are variable. The company expects a profit margin of 22%. Required: Calculate the price of each package using the variable cost-plus method.

3 DeeCees Pharmaceutical Company repacks medication tablets and distributes the products to pharmacies throughout Malaysia. The management accountant prices the product at cost-plus but realizes that the recent KPI (key performance index) incentives would call for a different pricing of those products, so that only controllable costs are included. The following related information is provided. Materials per package RM100.00 Direct labour per hour RM20.00 Manufacturing overheads RM30.00 Administrative and distribution expenses RM25.00 Each package takes about 10 minutes to complete packing. The management accountant estimates that 40% of the manufacturing overheads and administrative and distribution expenses are variable. The company expects a profit margin of 22%. Required: Calculate the price of each package using the variable cost-plus method.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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