Ionic Charge is a newly organized manufacturing company that plans to manufacture 60,000 units per year of a new prodect. The following estimates have been made of the company's costs and expenses other than income taxes Fixed Variable per unit Manufacturing costs Direct Materials $25 Direct Labor $15 Manufacturing overhead $500,000 8 Period Costs Selling expenses 2 Admin expenses $300,000 Totals $800,000 $50 A. What should the company establish as the sales price per unit if it sets a target of earning an operating income of $700,000 by producing and selling 60,000 units during the first year of operations.
Ionic Charge is a newly organized manufacturing company that plans to manufacture 60,000 units per year of a new prodect. The following estimates have been made of the company's costs and expenses other than income taxes Fixed Variable per unit Manufacturing costs Direct Materials $25 Direct Labor $15 Manufacturing overhead $500,000 8 Period Costs Selling expenses 2 Admin expenses $300,000 Totals $800,000 $50 A. What should the company establish as the sales price per unit if it sets a target of earning an operating income of $700,000 by producing and selling 60,000 units during the first year of operations.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Ionic Charge is a newly organized manufacturing company that plans to manufacture 60,000 units per year of a new prodect. The following estimates have been made of the company's costs and expenses other than income taxes
| Fixed | Variable per unit | |
| Direct Materials | $25 | |
| Direct Labor | $15 | |
| Manufacturing |
$500,000 | 8 |
|
Period Costs |
||
| Selling expenses |
2 |
|
| Admin expenses | $300,000 | |
| Totals | $800,000 | $50 |
A. What should the company establish as the sales price per unit if it sets a target of earning an operating income of $700,000 by producing and selling 60,000 units during the first year of operations.
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