**Aldean Company Pricing Strategy: Absorption Cost-Plus Method**Aldean Company intends to utilize absorption cost-plus pricing to determine the selling price for a new product. The company plans to invest $180,000 in operating assets to produce and sell 18,000 units, aiming for an 18% return on investment (ROI) in its operating assets. Below are the cost estimates provided by the accounting department for the new product:| **Cost Component** | **Per Unit** | **Total** ||-------------------------------------------------|--------------|------------|| Direct materials | $7.90 | || Direct labor | $5.90 | || Variable manufacturing overhead | $2.90 | || Fixed manufacturing overhead | | $138,600 || Variable selling and administrative expenses | $1.90 | || Fixed selling and administrative expenses | | $43,200 |**Required Calculations:**1. **Unit Product Cost:** Calculate the unit product cost for the new product. *(Round intermediate calculations and the final answer to 2 decimal places.)*2. **Markup Percentage:** Determine the markup percentage on absorption cost for the new product. *(Round intermediate calculations to 2 decimal places.)*3. **Selling Price Per Unit:** Establish the selling price for the new product using the markup percentage on absorption cost. *(Round intermediate calculations and final answer to 2 decimal places.)*| **Calculation** | **Result** ||--------------------------------------|------------|| 1. Unit product cost | || 2. Markup percentage on absorption cost | || 3. Selling price per unit | |

Name: **Aldean Company Pricing Strategy: Absorption Cost-Plus Method**Aldea
Uploaded: 2024-03-20T06:32:49.000Z
Channel: Bartleby
Description: **Aldean Company Pricing Strategy: Absorption Cost-Plus Method**Aldean Company intends to utilize absorption cost-plus pricing to determine the selling price for a new product. The company plans to invest $180,000 in operating assets to produce and

Required return = Operating assets x ROI = 180000*18% = $32,400 Fixed manufacturing overhead per…

Business

Accounting

Aldean Company wants to use absorption cost-plus pricing to set the selling price on a new product. The company plans to invest $180,000 in operating assets to produce and sell 18,000 units. Its required return on investment (ROI) in its operating assets is 18%. The accounting department has provided cost estimates for the new product as shown below: Per Unit Total $7.90 $5.90 $2.90 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses Fixed selling and administrative expenses $138,600 $1.90 $ 43,200 Required: 1. What is the unit product cost for the new product? (Round intermediate calculations and final answer to 2 decimal places.) 2. What is the markup percentage on absorption cost for the new product? (Round intermediate calculations to 2 decimal places.) 3. What selling price would the company establish for its new product using a markup percentage on absorption cost? (Round intermediate calculations and final answer to 2 decimal places.) 1. Unit product cost 2. Markup percentage on absorption cost % 3. Selling price per unit

Aldean Company wants to use absorption cost-plus pricing to set the selling price on a new product. The company plans to invest $180,000 in operating assets to produce and sell 18,000 units. Its required return on investment (ROI) in its operating assets is 18%. The accounting department has provided cost estimates for the new product as shown below: Per Unit Total $7.90 $5.90 $2.90 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses Fixed selling and administrative expenses $138,600 $1.90 $ 43,200 Required: 1. What is the unit product cost for the new product? (Round intermediate calculations and final answer to 2 decimal places.) 2. What is the markup percentage on absorption cost for the new product? (Round intermediate calculations to 2 decimal places.) 3. What selling price would the company establish for its new product using a markup percentage on absorption cost? (Round intermediate calculations and final answer to 2 decimal places.) 1. Unit product cost 2. Markup percentage on absorption cost % 3. Selling price per unit

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Stripe Company has been purchasing a component, Part Q, for P19.20 per unit. Stripe is currently operating at 70% of capacity, and no significant increase in production is anticipated in the near future. The cost of manufacturing a unit of Part Q is estimated as follows: Direct materials P11.50 Direct labor 4.50 Variable factory overhead 1.12 Fixed factory overhead 3.15 Total P20.27 Should the company make or buy the component? Prepare a differential analysis report dated March 12 of the current year to support your answer.
Manly Beach Enterprises projects the following information for the coming year. Sales Production 1,900 units 2,000 units Selling price per sewing machine Total variable manufacturing cost Total fixed manufacturing cost Marketing and administrative cost (40% variable based on sales) $200 $160,000 $60,000 $80,000 a. Determine the projected net income using absorption costing: $ b. Determine the projected net income using variable costing: $
Rooney Electronics currently produces the shipping containers it uses to deliver the electronics products it sells. The monthly cost of producing 9,100 containers follows. Unit-level materials Unit-level labor Unit-level overhead Product-level costs* $ 5,200 6,500 3,600 9,300 26,600 Allocated facility-level costs *One-third of these costs can be avoided by purchasing the containers. Russo Container Company has offered to sell comparable containers to Rooney for $2.70 each. Required a. Calculate the total relevant cost. Should Rooney continue to make the containers? b. Rooney could lease the space it currently uses in the manufacturing process. If leasing would produce $11,500 per month, calculate the total avoidable costs. Should Rooney continue to make the containers? a. Total relevant cost Should Rooney continue to make the containers? b. Total avoidable cost Should Rooney continue to make the containers?
Snipe Company has been purchasing a component, Part Q, for $19.20 a unit. Snipe is currently operating at 70% of capacity and no significant increase in production is anticipated in the near future. The cost of manufacturing a unit of Part Q, determined by absorption costing methods, is estimated as follows: Direct materials $11.50 Direct labor $4.50 Variable factory overhead $1.12 Fixed factory overhead $3.15 Total $20.27 Prepare a differential analysis report, dated March 12 of the current year, on the decision to make or buy Part Q.
Jaybird Company operates in a highly competitive market where the market price for its product is $145 per unit. Jaybird desires a 30% profit per unit. Jaybird expects to sell 5,000 units. Additional information is as follows: Variable Costs per Unit Fixed Costs (total) Direct materials S 24 Overhead $ 45,000 Direct labor 25 General and administrative 18,000 Overhead 23 General and administrative 29 To achieve the target cost per unit, Jaybird must reduce total expenses by how much? Multiple Choice $ 62,000 $51,000 $70, 500 $67,500 $60, 500
The machining division of Cullumber International has a capacity of 2,000 units. Its sales and cost data are: Selling price per unit $80 Variable manufacturing costs per unit 25 Variable selling costs per unit 3 Total fixed manufacturing overhead 183,200 The machining division is currently selling 1,800 units to outside customers, and the assembly division of Cullumber International wants to purchase 400 units from machining. If the transaction takes place, the variable selling costs per unit on the units transferred to assembly will be $0/unit, and not $3/unit. If Cullumber's assembly division is currently buying from an outside supplier at $75 per unit, what will be the effect on overall company profits if internal sales for 400 units take place at the optimum transfer price? The company profits would by $
ABC Company manufactures and sells three products: Products A, B, and C. The following data has been provided by the company: A ($) B ($) C (S) Selling Price 100 120 50 Variable Cost Per Unit 60 90 40 Forecasted sales are the following: Product A = 200 units; Product B =400 units; and Product C = 1,000 units. The company incurred $120,000 total fixed costs. Required: Weighted average contribution margin per unit Total breakeven sales units Breakeven sales units of Product A Breakeven sales units of Product B Breakeven sales units of Product C Breakeven sales dollars of Product A Breakeven sales dollars of Product B Breakeven sales dollars of Product C Sales mix of Product A, to Product B, to Product C Breakeven packages
Jordan electronics currently produces the shipping containers it uses to deliver the electronics products it sells. The monthly costs of producing 9,100 containers follow Unit-level material $6,000 Unit-level labor $6,700 unit-level overhead $3,300 product-level costs* $11,700 Allocated facility-level costs $26,500 *one-third of these costs can be avoided by purchasing the containers. Russo container company has offered to sell comparable containers to Jordan for $2.80 each. Required a) Calculate the total relevant cost should Jordan continue to make the containers. b) Jordan could lease the space it currently uses in the manufacturing process if leasing would produce $11,700 per month, and calculate the total avoidable costs. Should Jordan continue to make the containers? a) Total relevant cost should Jordan continue to make the containers? Total avoidable cost Should Jordan continue to make the containers?
Vishnu
Yancey, Inc. reports the following information: Units produced Units sold Sales price Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead 580 units 580 units $130 per unit $10 per unit $25 per unit - $30 per unit $22,000 per year Variable selling and administrative costs Fixed selling and administrative costs $20 per unit $15,000 per year What is the amount of unit product cost that will be considered for external reporting purposes? (Round any intermediate calculations and your final answer to the nearest cent.) OA. $95.00 OB. $72.93 OC. $102.93 OD. $62.93
Please help me with this question