Blue Spruce Windows Inc. is in the process of setting a target price on its newly designed tinted window. Cost data relating to the window at a budgeted volume of 5,040 units are as follows. Per Unit Total Direct materials $ 110 Direct labor $ 70 Variable manufacturing overhead $ 10 Fixed manufacturing overhead $ 151,200 Variable selling and administrative expenses $ 10 Fixed selling and administrative expenses $ 128,520 Blue Spruce Windows uses cost-plus pricing methods that are designed to provide the company with a 25% ROI on its tinted window line. A total of $1,280,160 in assets is committed to production of the new tinted window.

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter8: Budgeting
Section: Chapter Questions
Problem 4CMA: Krouse Company produces two products, forged putter heads and laminated putter heads, which are sold...
Question
Blue Spruce Windows Inc. is in the process of setting a target price on its newly designed tinted window. Cost data relating to the
window at a budgeted volume of 5,040 units are as follows.
Per Unit
Total
Direct materials
$ 110
Direct labor
$ 70
Variable manufacturing overhead
$ 10
Fixed manufacturing overhead
$ 151,200
Variable selling and administrative expenses
$ 10
Fixed selling and administrative expenses
$ 128,520
Blue Spruce Windows uses cost-plus pricing methods that are designed to provide the company with a 25% ROI on its tinted window
line. A total of $1,280,160 in assets is committed to production of the new tinted window.
Transcribed Image Text:Blue Spruce Windows Inc. is in the process of setting a target price on its newly designed tinted window. Cost data relating to the window at a budgeted volume of 5,040 units are as follows. Per Unit Total Direct materials $ 110 Direct labor $ 70 Variable manufacturing overhead $ 10 Fixed manufacturing overhead $ 151,200 Variable selling and administrative expenses $ 10 Fixed selling and administrative expenses $ 128,520 Blue Spruce Windows uses cost-plus pricing methods that are designed to provide the company with a 25% ROI on its tinted window line. A total of $1,280,160 in assets is committed to production of the new tinted window.
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