Dotterel Corporation uses the variable cost concept of product pricing. Below is cost information for the production and sale of 35,000 units of its sole product. Dotterel desires a profit equal to an 11.2% rate of return on invested assets of $350,000. Fixed factory overhead cost $105,000 Fixed selling and administrative costs 35,000 Variable direct materials cost per unit 4.34 Variable direct labor cost per unit 5.18 Variable factory overhead cost per unit 0.98 Variable selling and administrative cost per unit 0.70 The variable cost per unit for the production and sale of the company's product is a.$9.80 b.$12.60 c.$14.00 d.$11.20
Dotterel Corporation uses the variable cost concept of product pricing. Below is cost information for the production and sale of 35,000 units of its sole product. Dotterel desires a profit equal to an 11.2% rate of return on invested assets of $350,000. Fixed factory overhead cost $105,000 Fixed selling and administrative costs 35,000 Variable direct materials cost per unit 4.34 Variable direct labor cost per unit 5.18 Variable factory overhead cost per unit 0.98 Variable selling and administrative cost per unit 0.70 The variable cost per unit for the production and sale of the company's product is a.$9.80 b.$12.60 c.$14.00 d.$11.20
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Dotterel Corporation uses the variable cost concept of product pricing. Below is cost information for the production and sale of 35,000 units of its sole product. Dotterel desires a profit equal to an 11.2% rate of return on invested assets of $350,000.
The variable cost per unit for the production and sale of the company's product is
| Fixed |
$105,000 |
| Fixed selling and administrative costs | 35,000 |
| Variable direct materials cost per unit | 4.34 |
| Variable direct labor cost per unit | 5.18 |
| Variable factory overhead cost per unit | 0.98 |
| Variable selling and administrative cost per unit | 0.70 |
The variable cost per unit for the production and sale of the company's product is
a.$9.80
b.$12.60
c.$14.00
d.$11.20
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