Assume that a company uses the absorption costing approach to cost-plus pricing. It is considering the introduction of a new product that it hopes to produce and sell at a volume of 10,000 units per year. To determine a selling price, the company has gathered the following information: Direct materials per unit $ 11 Direct labor unit $ 10 Variable manufacturing overhead per unit $ 2 Variable selling expense $ 4 Total fixed manufacturing overhead $ 90,000 Fixed selling and administrative expense $ 40,000 Markup percentage on absorption cost 35% Using the absorption costing approach to cost-plus pricing, what selling price would the company establish for this product? Multiple Choice $38.60 $54.00 $48.60 $43.20

Assume that a company uses the absorption costing approach to cost-plus pricing. It is considering the introduction of a new product that it hopes to produce and sell at a volume of 10,000 units per year. To determine a selling price, the company has gathered the following information: Direct materials per unit $ 11 Direct labor unit $ 10 Variable manufacturing overhead per unit $ 2 Variable selling expense $ 4 Total fixed manufacturing overhead $ 90,000 Fixed selling and administrative expense $ 40,000 Markup percentage on absorption cost 35% Using the absorption costing approach to cost-plus pricing, what selling price would the company establish for this product? Multiple Choice $38.60 $54.00 $48.60 $43.20

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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Al Ziyabi Company, a leading textile manufacturer is required to prepare a cost-volume-profit analysis report for the two products being produced in its company. Product A Price per unit (RO) Particulars Sales price Material Direct wages Variable expenses Fixed expenses 17 8 100% of direct wages RO 1100 The following scenarios are predicted by the Management: Scenario 1: 200 units of product A and 100 units of product B Scenario 2: 150 units of product A and 150 units of product B Scenario 3: 250 units of product A and 50 units of product B Product B Price per unit (RO) 4 100% of direct wages RO 1100 Ï
1. If the company uses absorption costing ,variable costing and super-variable costing What is the product cost per unit for 2020? . What is the 2020 net operating income? Please answer all the three methods
Assume the following information for a company that produced 10,000 units and sold 9,000 units during its first year of operations: Selling price Direct materials Direct labor Variable manufacturing overhead Sales commission Fixed manufacturing overhead Per Unit $ 200 $ 72 $ 50 $ 10 $8 Multiple Choice $ 287,000 Which of the following choices explains the relationship between the absorption costing net operating income and the variable costing net operating income? The absorption costing net operating income will be lower than the variable costing net operating income by $28,700. The absorption costing net operating income will be lower than the variable costing net operating income by $100,700. Per Year The absorption costing net operating income will be higher than the variable costing net operating income by $28,700.
Assume you are the department B manager for Marleys manufacturing. Marley’s operates under a cost-based transfer structure. Assume you receive the majority of your raw materials from department A, which sells only to department B (they have no outside sales) Assume the market price for the items your department purchase is 15% below what you are being charged by department A of Marley’s manufacturing. Determine the operating income for department B, assuming department A “sold” department B 1,000 unit during the month and department A reduced the selling price to the market price. Round your percentage answer to one decimal.
Assume the following information for a company that produced and sold 10,000 units during its first year of operations: Per Unit Per Year $ 200 $ 75 $ 50 $ 10 Selling price Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead $ 300,000 Using absorption costing, what is the company's gross margin per unit?
Assume a company is considering buying 10,000 units of a component part rather than making them. A supplier has agreed to sell the company 10,000 units for a price of $41.25 per unit. The company's accounting system reports the following costs of making the part: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead, traceable Fixed manufacturing overhead, allocated Total cost Per Unit $19 12 2 8 4 $45 10,000 Units per Year. $190,000 120,000 20,000 80,000 40,000 $450,000 One-half of the traceable fixed manufacturing overhead relates to supervisory salaries and the remainder relates to depreciation of equipment with no salvage value. If the company chooses to buy this component part from a supplier, then the supervisor who oversees its production would be discharged. What is the financial advantage (disadvantage) of buying 10,000 units from the supplier?
Yancey, Inc reports the following information Units produced Units sold Sales poce Direct materials Direct labor 520 units 520 units $150 per unit $40 per unit $30 per unit Variable manufacturing overhead Fixed manufacturing overhead $20 per unit $24,000 per year $15 per unit Variable selling and administrative costs Fixed selling and administrative costs $25,000 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. $76 15 OB 5136 15 OC. $116 15 OD $80.00
1. Assume that the company uses absorption costing A) compute the unit product cost B) prepare an income statement for a year(do not leave empty spaces;input a 0 whatever it is required) 2. Assume the company uses variable costing A) compute the unit product cost B) prepare an income statmement(input 0 on empty spaces)
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