Assuming that Arrow desires to sell its chairs for cost plus 40 percent of cost, what price should be charged for the chairs produced in January and February? (Round intermediate calculations and final answers to 2 decimal places.)
Arrow Manufacturing Co. expects to make 50,000 chairs during the year 1 accounting period. The company made 3,000 chairs in January. Materials and labor costs for January were $36,000 and $48,000, respectively. Arrow produced 4,000 chairs in February. Material and labor costs for February were $48,000 and $60,000, respectively. The company paid the $480,000 annual rental fee on its manufacturing facility on January 1, year 1. The rental fee is allocated based on the total estimated number of units to be produced during the year.
Required
Assuming that Arrow desires to sell its chairs for cost plus 40 percent of cost, what price should be charged for the chairs produced in January and February? (Round intermediate calculations and final answers to 2 decimal places.)
![Exercise 12-12A (Static) How the allocation of fixed cost affects a pricing decision LO 12-3
Arrow Manufacturing Co. expects to make 50,000 chairs during the year 1 accounting period. The company made 3,000 chairs in
January. Materials and labor costs for January were $36,000 and $48,000, respectively. Arrow produced 4,000 chairs in February.
Material and labor costs for February were $48,000 and $60,000, respectively. The company paid the $480,000 annual rental fee on
its manufacturing facility on January 1, year 1. The rental fee is allocated based on the total estimated number of units to be produced
during the year.
Required
Assuming that Arrow desires to sell its chairs for cost plus 40 percent of cost, what price should be charged for the chairs produced in
January and February? (Round intermediate calculations and final answers to 2 decimal places.)
> Answer is complete but not entirely correct.
January
February
52.64 $ 55.60 x
Price per
unit
$](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F082b80ef-cada-468c-892f-73c9c113abca%2F17e0f0de-f05d-47fd-b50a-daaf44273516%2F2ykfj3_processed.png&w=3840&q=75)
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