Exercise 13-9A (Static) Using the contribution margin approach for a special order decision LO 13-2 Hensely Company, which produces and sells a small digital clock, bases its pricing strategy on a 25 percent markup on total cost. Based on annual production costs for 25,000 units of product, computations for the sales price per clock follow. Unit-level costs Fixed costs Total cost (a) Markup (a x 0.25) Total sales (b) Sales price per unit (b ÷ 25,000) Required $240,000 60,000 300,000 75,000 $375,000 $15 a. Hensely has excess capacity and receives a special order for 8,000 clocks for $12 each. Calculate the contribution margin per unit. Based on this, should Hensely accept the special order? b. Prepare a contribution margin income statement for the special order. Complete this question by entering your answers in the tabs below. Required A Required B Hensely has excess capacity and receives a special order for 8,000 clocks for $12 each unit. Based on this, should Hensely accept the special order? Note: Round your answer to 2 decimal places. Contribution margin per unit Should Hensely accept the special order? < Required A Required B >

Exercise 13-9A (Static) Using the contribution margin approach for a special order decision LO 13-2 Hensely Company, which produces and sells a small digital clock, bases its pricing strategy on a 25 percent markup on total cost. Based on annual production costs for 25,000 units of product, computations for the sales price per clock follow. Unit-level costs Fixed costs Total cost (a) Markup (a x 0.25) Total sales (b) Sales price per unit (b ÷ 25,000) Required $240,000 60,000 300,000 75,000 $375,000 $15 a. Hensely has excess capacity and receives a special order for 8,000 clocks for $12 each. Calculate the contribution margin per unit. Based on this, should Hensely accept the special order? b. Prepare a contribution margin income statement for the special order. Complete this question by entering your answers in the tabs below. Required A Required B Hensely has excess capacity and receives a special order for 8,000 clocks for $12 each unit. Based on this, should Hensely accept the special order? Note: Round your answer to 2 decimal places. Contribution margin per unit Should Hensely accept the special order? < Required A Required B >

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter11: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 18E: Target costing Toyota Motor Corporation (TM) uses target costing. Assume that Toyota marketing...

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Exercise I-Set B Palawan Company must determine a target selling price for one of its products. Cost data relating to the product are as follows: Per Unit P 30 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable administrative and selling expenses 15 5 Fixed administrative and expenses 40 The costs above are based on an anticipated volume of 70,000 units produced and sold each period. The company uses cost-plus pricing, and it has a policy of obtaining target selling prices by adding a markup of 50% of unit manufacturing cost or by adding a markup of 80% of variable costs. Required: 1. Compute the target selling price per unit using absorption costing. 2. Compute the target selling price per unit using contribution costing.
G http Chapter Review My... Sales price Contribution margin ratio Fixed costs Tra.. Vernon Company reported the following data regarding the product it sells: a. Break-even point in dollars a. Break-even point in units b. Sales in dollars b. Sales in units c. Break-even point in dollars c. Break-even point in units $60 Man... $ 10% $216,000 M Questio... Required Use the contribution margin ratio approach and consider each requirement separately. b Ans... 2,160,000 36,000 Bes... Saved a. What is the break-even point in dollars? In units? b. To obtain a profit of $54,000, what must the sales be in dollars? In units? c. If the sales price increases to $72 and variable costs do not change, what is the new break-even point in dollars? In units? US fron.
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Unit sales (a) Selling price per unit Variable cost per unit Traceable fixed expense TB MC Qu. 12A-46 Woodridge Corporation manufactures numerous... Woodridge Corporation manufactures numerous products, one of which is called Alpha-32. The company has provided the following data about this product Multiple Choice $1,375,220 77,000 76.00 61.00 $1,323,000 $52.220 Help $ $ Management is considering increasing the price of Alpha-32 by 5%, from $76.00 to $79.80. The company's marketing managers estimate that this price hike would decrease unit sales by 5%, from 77,000 units to 73,150 units Assuming that the total traceable fixed expense does not change, what net operating income will product Alpha-32 earn at a price of $79.80 if this sales forecast is correct? Save & Exit
K A product costs $500 to manufacture and $30 to market and $10 to distribute (ship to customers) R&D costs are allocated at $20 per unit. Based on a targeted rate of return, manager uses a mark-up of 10%. What is the markup component based on a Cost-Plus pricing approach?
Exercise I-Set A Puerto Princesa Company must determine a target selling price for one of its products. Cost data relating to the product are as follows: Per Unit Total Direct materials P 60 Direct labor 100 30 Variable manufacturing overhead Fixed manufacturing overhead Variable administrative and selling expenses Fixed administrative and expenses 50 P4,500,000 10 40 3,600,000 The costs above are based on an anticipated volume of 90,000 units produced and sold each period. The company uses cost-plus pricing, and it has a policy of obtaining target selling prices by adding a markup of 50% of unit manufacturing cost or by adding a markup of 80% of variable costs. Required: 1. Compute the target selling price per unit using absorption costing 2. Compute the target selling price per unit using contribution costing
Question #1 Which of the following factors should be considered in a make-or-buy decision A variable cost of manufacturing purchase price if item is bought outside fixed overhead that is directly traced to the item all of the above Question #2 How much sales are required to earn a target net income of P160,000 if total fixed costs are P200,000 and the contribution margin ratio is 40%? A) 510,000 B) 810,000 900,000 400,000
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QUESTION 4 Exxarro Llimited is considering pricing and costing for the year ahead. The following data based on expected production and sales of 15 000 units are provided for analysis: Variable manufacturing cost Fixed manufacturing cost R1 185 000 R510 000 R5 per unit sold R130 000 Sales commission Fixed administration cost Sales R210 per unit Study the information provided above and answer the following questions independently: 4.1 Calculate the break-even sales value. 4.2 Calculate the sales volume required to achieve a profit of R 800 000. 4.3 Suppose Exxaro Limited is considering a decrease of 10% per unit in the selling price of the product with the expectation that it would increase sales volume by 10%. Is this a good idea? Motivate your answer with relevant calculations.
Problem 10. Bulac Corporation manufactures and sells two products – Bangus and Tupig. Current revenue, costs and sales data on the two products appear below. Bangus P400 Tupig P600 Selling price per unit Variable cost per unit Number of units sold monthly 240 120 200 units 300 units Fixed costs and expenses are P704,000 per month. Required: a. Average contribution margin ratio. b. Composite breakeven point in units and in pesos. c. Allocation of composite breakeven point in units. d. Assuming the company increases its fixed costs and expenses by P140,800, how many units of Bangus and Tupig should be sold at breakeven point? e. Refer to the original data, assuming the sales mix between Bangus and Tupig is 500 units for Bangus and 300 units for Tupig, what is the new combined breakeven point in units and in pesos? f. Consider the original data, except that Pangasinan Company based its sales mix in units. Determine the following: i. Average UCM. ii. Composite BEP in units and in pesos.
Question 8 -/1 S View Policies ons Current Attempt in Progress Support Morales Corporation produces microwave ovens. The following per unit cost information is available: direct materials $34, direct labor $29, variable manufacturing overhead $15, fixed manufacturing overhead $42, variable selling and administrative expenses $17, and fixed selling and administrative expenses $26. Its desired ROI per unit is $29. Compute the markup percentage using absorption- cost pricing. (Round answer to 2 decimal places, eg al 10.50%.) Markup percentage 8:44 PM ) 11/18/2019 hp ho l ins 12 home end delete pg up prt sc 44 ++ backspace lock 7 P Dome CO 96
EXERCISE A-2 Absorption Costing Approach to Setting a Selling Price LOZ) Martin Company is considering the introduction of a new product. To determine a selling price, the company has gathered the following information: Number of units to be produced and sold each year. Unit product cost.... Projected annual selling and administrative expenses Estimated investment required by the company Desired return on investment (ROI) 14,000 $25 $50,000 $750,000 12% Required: The company uses the absorption costing approach to cost-plus pricing. 1. Compute the markup required to achieve the desired ROI. 2. Compute the selling price per unit.