In order to sell a product at a profit, the product must be priced higher than the total cost to build the unit, plus period expenses and overhead. At the end of last year, Chester had their product Cake aimed at the Americas Budget segment. Usethe Globe's Product Analysis to find Cake's production cost (labor + materials) in the Americas region. Exclude possible inventory carrying costs. Assume period expenses and overhead total 50% of their production cost. What is the minimumprice the product could have been sold for in the American region to cover the unit cost, period expenses, and overhead? Question 4 options: 1) $14.07 2) $21.11 3) $20.46 4) $24.50

References Faria, A. R., Ferreira, L., & Trigueiros, D. (2018). Analyzing customer profitability…

Answered: In order to sell a product at a profit,…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Alpha Company’s Manager is considering selling price for product C.The company is using Absortion Costing in determining the total cost for each product.From the financial perspective, the company is planned to operate with cost:Production Expence Rp 3.000.000.000Administration Expense 200.000.000Marketing Expense 300.000.000The predicted total asset in the beginning year is Rp 4.000.000.000, and the return ofinvestment (ROI) is 25%Determine the mark up percentage for product C in Alpha Company using Cost-PlusPricing Method and Absortion Costing! From the results of the mark up percentage for product C in question above, determinethe selling price per kg using the Cost-Plus Pricing method based on the AbsortionCosting Approach and the company's normal capacity for product C of 1,000,000 kg!
A new product is being designed by an engineering team at Golem Security. Several managers and employees from the cost accounting department and the marketing department are also on the team to evaluate the product and determine the cost using a target costing methodology. An analysis of similar products on the market suggests a price of $132.00 per unit. The company requires a profit of 0.20 of selling price. How much is the target cost per unit? Round to two decimal places.
Basic Motor Corporation uses target costing. Assume that Basic marketing personnel estimate that the competitive selling price for the QuikCar in the upcoming model year will need to be $23,100. Assume further that the QuikCar's total unit cost for the upcoming model year is estimated to be $19,200 and that Basic requires a 20% profit margin on selling price (which is equivalent to a 25% markup on total cost). a. What price will Basic establish for the QuikCar for the upcoming model year?
a) Compute the breakeven sales dollars of cach product assuming the same sales mix remains constant. b) Prepare an analysis showing whether Product Z should be eliminated. The amount of change to net income should be computed. c) Assume the current demand of cach product is same as the sales volume the company has for the year. Below is the machine processing time required for cach product. Product Machine processing time in hours i. How many units should the company produce for each product if there is a constraint of only 24.000 hours of machine processing time in the year. ii. Compute the highest possible net income camed by the company. 3 2 An accountant has prepared the folowing product-line income statement for the year: Product Tatal No of mts sokd 5,000 4,000 4,000 Saks Varible enpermes 200,000 S 120,000 100,000 S 60.000 40,000 S 20,000 60,000 40,000 20,000 Cotribution mangin 80,000 40,000 20,000 Fihed expenses Rert Depreciin 10,000 12,000 8,000 5.000 6,000 2,000 2,400 3,000…
Basic Motor Corporation uses target costing. Assume that Basic marketing personnel estimate that the competitive selling price for the QuikCar in the upcoming model year will need to be $23,400. Assume further that the QuikCar's total unit cost for the upcoming model year is estimated to be $19,900 and that Basic requires a 20% profit margin on selling price (which is equivalent to a 25% markup on total cost). a. What price will Basic establish for the QuikCar for the upcoming model year?$fill in the blank 1 b. Since the estimated manufacturing cost the target cost, Basic its total costs to maintain competitive pricing within its profit objectives.
Assume that a company uses the absorption costing approach to cost-plus pricing. It 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 Estimated annual selling and administrative expenses Estimated investment required by the company Desired return on investment (ROI) What is the markup percentage on absorption cost required to achieve the desired ROI? 15,000 30 $ $81,900 $780,000 12%
Assume that a company uses the absorption costing approach to cost-plus pricing. It 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 15,000 Unit product cost $ 30 Estimated annual selling and administrative expenses $ 68,400 Estimated investment required by the company $ 780,000 Desired return on investment (ROI) 12 % What is the markup percentage on absorption cost required to achieve the desired ROI? Multiple Choice 41% 46% 36% 31%
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Martin Company uses the absorption costing approach to cost-plus pricing. It 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. 10,500 24 32 Unit product cost Estimated annual selling and administrative expenses Estimated investment required by the company Desired return on investment (ROI) 34,800 $ 690,000 ok 12% nt Required: 1. Compute the markup percentage on absorption cost required to achieve the desired ROI. 2. Compute the selling price per unit. (Do not round intermediate calculations. Round your answer to 2 decimal places.) nt ences 1. Markup percentage on absorption cost 2. Selling price per unit Prev 1 of 3 Next >
Martin Company uses the absorption costing approach to cost-plus pricing. It 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 6,000 Unit product cost $ 50 Estimated annual selling and administrative expenses $ 24,000 Estimated investment required by the company $ 300,000 Desired return on investment (ROI) 12 % Required: 1. Compute the markup percentage on absorption cost required to achieve the desired ROI. 2. Compute the selling price per unit. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Martin Company uses the absorption costing approach to cost-plus pricing. It 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 9,500 Unit product cost $ 36 Estimated annual selling and administrative expenses $ 41,100 Estimated investment required by the company $ 370,000 Desired return on investment (ROI) 12 % Required: 1. Compute the markup percentage on absorption cost required to achieve the desired ROI. 2. Compute the selling price per unit.
I ONLY NEED #4, 5, & 6 Contribution Margin, Break-Even Sales, Cost-Volume-Profit Chart, Margin of Safety, and Operating Leverage Belmain Co. expects to maintain the same inventories at the end of 20Y7 as at the beginning of the year. The total of all production costs for the year is therefore assumed to be equal to the cost of goods sold. With this in mind, the various department heads were asked to submit estimates of the costs for their departments during the year. A summary report of these estimates is as follows: Estimated Fixed Cost Estimated Variable Cost (per unit sold) Production costs: Direct materials — $26 Direct labor — 17 Factory overhead $265,400 13 Selling expenses: Sales salaries and commissions 55,200 6 Advertising 18,700 — Travel 4,100 —…

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