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Incorporated, manufactures and sells compact discs. Pr g price per unit (package of two CDs) le costs per unit: ct material ct labor facturing overhead ing expenses tal variable costs per unit

Incorporated, manufactures and sells compact discs. Pr g price per unit (package of two CDs) le costs per unit: ct material ct labor facturing overhead ing expenses tal variable costs per unit

FINANCIAL ACCOUNTING
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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Required information [The following information applies to the questions displayed below.] Serendipity Sound, Incorporated, manufactures and sells compact discs. Price and cost data are as follows: Selling price per unit (package of two CDs) Variable costs per unit: Direct material Direct labor Manufacturing overhead Selling expenses Total variable costs per unit Annual fixed costs: Manufacturing overhead Selling and administrative Total fixed costs Forecasted annual sales volume (120,000 units) In the following requirements, ignore income taxes. $ 25.00 $10.50 5.00 3.00 1.30 $19.80 $ 192,000 276,000 $ 468,000 $ 3,000,000 6. If the company's direct-labor costs do increase by 8 percent, what selling price per unit of product must it charge to maintain the same contribution-margin ratio? Note: Do not round intermediate calculations. Round your answer to 2 decimal places.
Transcribed Image Text:Required information [The following information applies to the questions displayed below.] Serendipity Sound, Incorporated, manufactures and sells compact discs. Price and cost data are as follows: Selling price per unit (package of two CDs) Variable costs per unit: Direct material Direct labor Manufacturing overhead Selling expenses Total variable costs per unit Annual fixed costs: Manufacturing overhead Selling and administrative Total fixed costs Forecasted annual sales volume (120,000 units) In the following requirements, ignore income taxes. $ 25.00 $10.50 5.00 3.00 1.30 $19.80 $ 192,000 276,000 $ 468,000 $ 3,000,000 6. If the company's direct-labor costs do increase by 8 percent, what selling price per unit of product must it charge to maintain the same contribution-margin ratio? Note: Do not round intermediate calculations. Round your answer to 2 decimal places.
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