Eco Textiles manufactures sustainable fabrics for clothing companies. The estimated cost to produce a yard of fabric is: Direct materials - $2.30 Direct labor $1.20 Variable overhead - $1.85 Fixed overhead - $2.90 Total = $8.25 Variable selling costs per unit - $1.75 Fixed administration charges - $15,000 If Eco Textiles prices its product using a markup of 120% of its variable production costs, what would the unit selling price be?

Eco Textiles manufactures sustainable fabrics for clothing companies. The estimated cost to produce a yard of fabric is: Direct materials - $2.30 Direct labor $1.20 Variable overhead - $1.85 Fixed overhead - $2.90 Total = $8.25 Variable selling costs per unit - $1.75 Fixed administration charges - $15,000 If Eco Textiles prices its product using a markup of 120% of its variable production costs, what would the unit selling price be?

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter7: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 58P: Polaris Inc. manufactures two types of metal stampings for the automobile industry: door handles and...

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Paxton Company can produce a component of its product that incurs the following costs per unit: direct materials, $10.50; direct labor, $14.50, and incremental overhead $3.50. An outside supplier has offered to sell the product to Paxton for $37.00. Compute the net incremental cost or savings of buying the component. Multiple Choice $3.50 cost per unit $8 5 savings per unit. $0 cost or savings per unit $8.50 cost per unit. $3.50 savings per unit
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Voice Com, Inc. uses the product cost method of applying the cost-plus approach to product pricing. The costs of producing and selling 4,950 cell phones are as follows: Variable costs per unit: Direct materials Direct labor Factory overhead Selling and administrative expenses Total variable cost per unit $69 32 26 20 Fixed costs: Factory overhead Selling and administrative expenses Voice Com desires a profit equal to a 15% return on invested assets of $600,500. $147 > a. Determine the amount of desired profit from the production and sale of 4,950 cell phones. 90,075 $199,200 68,900 b. Determine the product cost per unit for the production of 4,950 cell phones. Round your answer to the nearest whole dollar. -158 X per unit Total Cost c. Determine the product cost markup percentage for cell phones. Round your answer to two decimal places. -66 X % Markup Selling price d. Determine the selling price of cell phones. Round your answers to the nearest whole dollar. per unit per unit per unit
Wheeler Company can produce a product that incurs the following costs per unit: direct materials, $10.50; direct labor, $24.50, and incremental overhead, $9.30. An outside supplier has offered to sell the product to Wheeler for $47.60. Compute the net incremental cost or savings of buying.
Compute the net incremental cost or savings of buying the
Compute the net incremental cost
Compute the net incremental cost or savings of buying the component
What are the fixed overhead costs of making the component?
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Hummingbird Company uses the product cost concept of applying the cost-plus approach to product pricing. The costs and expenses of producing 25,000 units of Product K are as follows: Variable costs: Direct materials $2.50 Direct labor 4.25 Factory overhead 1.25 Selling and administrative expenses 0.50 Total $8.50 Fixed costs: Factory overhead $25,000 Selling and administrative expenses 17,000 Hummingbird desires a profit equal to a 5% rate of return on invested assets of $642,500. a. Determine the amount of desired profit from the production and sale of Product K. b. Determine the total manufacturing costs and the cost amount per unit for the production of 25,000 units of Product K. Total manufacturing costs Cost amount per unit c. Determine the markup percentage for Product K. Round your answer to one decimal place. d. Determine the selling price of Product K. Round your answer to two decimal places.