Martin Company uses the absorption costing approach to cost-plus pricing. It is considering the introduction of a new product. Todetermine a selling price, the company gathered the following information:Number of units to be produced and sold each yearUnit product costEstimated annual selling and administrative expensesEstimated investment required by the companyDesired return on investment (ROI)Required:1. Compute the markup percentage on absorption cost required to achieve the desired ROI.2. Compute the selling price per unit.Note: Do not round intermediate calculations. Round your answer to 2 decimal places.1. Markup percentage on absorption cost2. Selling price per unit12,000$26.00$ 26,400$ 300,00012%%

Here in this question, we are required to determine markup percentage on absorption cost to achieve…

Answered: artin Company uses the absorption…

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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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: $
Information concerning a product produced by Ender Company appears here: Sales price per unit $ 174 Variable cost per unit $ 76 Total annual fixed manufacturing and operating costs $ 656,600 Required Determine the following: Contribution margin per unit. Number of units that Ender must sell to break even. Sales level in units that Ender must reach to earn a profit of $245,000. Determine the margin of safety in units, sales dollars, and as a percentage.
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Basic Motor Corporation uses target costing. Assume that Basic marketing personnel estimate that the competitive selling price for the QuikCar in the upcoming model year will need to be $23,500. Assume further that the QuikCar's total unit cost for the upcoming model year is estimated to be $19,400 and that Basic requires a 20% profit margin on selling price (which is equivalent to a 25% markup on total cost). a. What price will Basic establish for the QuikCar for the upcoming model year?$fill in the blank 1 b. Since the estimated manufacturing cost the target cost, Basic its total costs to maintain competitive pricing within its profit objectives.
Accel Corp makes two products: C and D. The following data have been summarized (Click the icon to view the data.) Accel Corp desires a 28% target gross profit after covering all product costs. Considering the total product costs assigned to the Products C and D, what would Accel have to charge the customer to achieve that gross profit? Round to two decimal places Begin by selecting the formula to compute the amount that the company should charge for each product Direct labor cost per unit Direct materials cost per unit Indirect manufacturing cost per unit Product cost as a percentage of sales price Target gross profit percentage Total product cost per unit Get more help. Clear all Show work Required sales price per unit Check answer
Basic Motor Corporation uses target costing. Assume that Basic marketing personnel estimate that the competitive selling price for the QuikCar in the upcoming model year will need to be $23,400. Assume further that the QuikCar's total unit cost for the upcoming model year is estimated to be $19,900 and that Basic requires a 20% profit margin on selling price (which is equivalent to a 25% markup on total cost). a. What price will Basic establish for the QuikCar for the upcoming model year?$fill in the blank 1 b. Since the estimated manufacturing cost the target cost, Basic its total costs to maintain competitive pricing within its profit objectives.
Jamison Company uses the total cost method of applying the cost-plus approach to product pricing. Jamison produces and sells Product X at a total cost of $800 per unit, of which $540 is product cost and $260 is selling and administrative expenses. In addition, the total cost of $800 is made up of $460 variable cost and $340 fixed cost. The desired profit is $88 per unit. Determine the markup percentage on total cost. %

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