A company's invested capital is $13,000,000 and management has determined that the target rate of return on investment is 10%. Last year, the company produced 121,313 units and this year expects to units sales to be 10% above last year. The cost of the product is estimated to be $13 per unit. What is the target operating income per unit? (Round any intermediary calculations to the nearest unit and your final answer to the nearest cent.) a. $9.74 b. $9.00 c. $8.31 d. $8.99
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
A company's invested capital is $13,000,000 and management has determined that the target rate of
| a. |
$9.74 |
|
| b. |
$9.00 |
|
| c. |
$8.31 |
|
| d. |
$8.99 |
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