Case 1: LAC Corporation is in the process of setting a selling price for a new product it has just designed. The following data is related to this product for a budgeted volume of 20,000 units Per unit Total Direct Materials 15 Direct Labor 13 Variable Manufacturing Overhead 19 Fixed Manufacturing Overhead 320,000 Variable Selling and Administrative Expenses 7 Fixed Selling and Administrative Expenses 180,000 The Corporation uses the cost-plus pricing to set its target selling price. The markup on total unit cost is 25% Required: Answer the following three questions - circle the correct answer The total cost per unit is: a. $79 b. $54 c. $25 d. None of the options The markup per unit is: a. $67.5 b. $19.75 c. $31.25 d. None of the options The target selling price per unit is: a. $98.75 b. $19.75 c. $13.5 d. None of the options
Case 1: LAC Corporation is in the process of setting a selling price for a new product it has just designed. The following data is related to this product for a budgeted volume of 20,000 units Per unit Total Direct Materials 15 Direct Labor 13 Variable Manufacturing Overhead 19 Fixed Manufacturing Overhead 320,000 Variable Selling and Administrative Expenses 7 Fixed Selling and Administrative Expenses 180,000 The Corporation uses the cost-plus pricing to set its target selling price. The markup on total unit cost is 25% Required: Answer the following three questions - circle the correct answer The total cost per unit is: a. $79 b. $54 c. $25 d. None of the options The markup per unit is: a. $67.5 b. $19.75 c. $31.25 d. None of the options The target selling price per unit is: a. $98.75 b. $19.75 c. $13.5 d. None of the options
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
Transcribed Image Text:Solve the following two independent cases
Case 1:
LAC Corporation is in the process of setting a selling price for a new product it has just designed. The
following data is related to this product for a budgeted volume of 20,000 units
Per unit
Total
Direct Materials.
15
Direct Labor
13
Variable Manufacturing Overhead
19
Fixed Manufacturing Overhead
320,000
Variable Selling and Administrative Expenses
7
Fixed Selling and Administrative Expenses
180,000
The Corporation uses the cost-plus pricing to set its target selling price. The markup on total unit cost is 25%
Required: Answer the following three questions - circle the correct answer
The total cost per unit is:
a. $79
b. $54
c. $25
d. None of the options
The markup per unit is:
a. $67.5
b. $19.75
c. $31.25
d. None of the options
The target selling price per unit is:
a. $98.75
b. $19.75
c. $13.5
d. None of the options
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