Exercise 4-11A (Algo) How the allocation of fixed cost affects a pricing decision LO 4-3 Sibson Manufacturing Co. expects to make 30,400 chairs during the year 1 accounting perlod. The company made 4,300 chairs in Banuary. Materials and labor costs for January were $16,600 and $25,000, respectively. Gibson produced 1,200 chairs in February. Material and labor costs for February were $9,200 and $13,000, respectively. The company paid the $456,000 annual rental fee on it manufacturing facility on January 1, year 1. The rental fee is allocated based on the total estimated number of units to be produced during the year. Required Assuming that Gibson desires to sell its chairs for cost plus 25 percent of cost, what price should be charged for the chairs produced n January and February? (Round intermediate calculations and final answers to 2 decimal places.)
Exercise 4-11A (Algo) How the allocation of fixed cost affects a pricing decision LO 4-3 Sibson Manufacturing Co. expects to make 30,400 chairs during the year 1 accounting perlod. The company made 4,300 chairs in Banuary. Materials and labor costs for January were $16,600 and $25,000, respectively. Gibson produced 1,200 chairs in February. Material and labor costs for February were $9,200 and $13,000, respectively. The company paid the $456,000 annual rental fee on it manufacturing facility on January 1, year 1. The rental fee is allocated based on the total estimated number of units to be produced during the year. Required Assuming that Gibson desires to sell its chairs for cost plus 25 percent of cost, what price should be charged for the chairs produced n January and February? (Round intermediate calculations and final answers to 2 decimal places.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Exercise 4-11A (Algo) How the allocation of fixed cost affects a pricing decision LO 4-3
Gibson Manufacturing Co. expects to make 30,400 chairs during the year 1 accounting period. The company made 4,300 chairs in
January. Materials and labor costs for January were $16,600 and $25,000, respectively. Gibson produced 1,200 chairs in February.
Material and labor costs for February were $9,200 and $13,000, respectively. The company paid the $456,000 annual rental fee on its
manufacturing facility on January 1, year 1. The rental fee is allocated based on the total estimated number of units to be produced
during the year.
Required
Assuming that Gibson desires to sell its chairs for cost plus 25 percent of cost, what price should be charged for the chairs produced
in January and February? (Round intermediate calculations and final answers to 2 decimal places.)
January
February
Price per unit
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