ame of 50,000 units. Per Unit Total $50 26 Facturing overhead 20 turing overhead $600,000
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
![Lovell Computer Parts Inc. is in the process of setting a selling price on a new
component it has just designed and developed. The following cost estimates
for this new component have been provided by the accounting department for
a budgeted volume of 50,000 units.
Per Unit Total
Direct materials
$50
Direct labor
26
Variable manufacturing overhead
20
Fixed manufacturing overhead
$600,000
Variable selling and administrative expenses 19
Fixed selling and administrative expenses
400,000
Lovell Computer Parts management requests that the total unit cost be used in
cost-plus pricing its products. On this particular product, management also
directs that the target price be set to provide a 25% return on investment (ROI)
on invested assets of $1,000,000.
Instructions
(Round all calculations to two decimal places.)
Compute the markup percentage and target selling price that will allow Lovell
Computer Parts to earn its desired ROI of 25% on this new component.
Assuming that the volume is 40,000 units, compute the markup percentage and
target selling price that will allow Lovell Computer Parts to earn its desired ROI of
25% on this new component.
b. Target selling price $146.25](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa7ebd3dc-80e3-4b15-a64f-280f53331561%2Ff171c299-74e9-4fc5-917b-9f8b3f82100c%2Fwt6ale_processed.jpeg&w=3840&q=75)
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