Jessup Company expects to incur overhead costs of $20,000 per month and direct production costs of $125 per unit. The estimated production activity for the upcoming year is 1,000 units. If the company desires to earn a gross profit of $50 per unit, the sales price per unit would be which of the following amounts?

Jessup Company expects to incur overhead costs of $20,000 per month and direct production costs of $125 per unit. The estimated production activity for the upcoming year is 1,000 units. If the company desires to earn a gross profit of $50 per unit, the sales price per unit would be which of the following amounts?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 5EB: Cadre, Inc., sells a single product with a selling price of $120 and variable costs per unit of $90....

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Step by step Answer
Jessup Company expects to incur manufacturing overhead costs of $20,000 each month during the year ending December 31, 2022 and direct production costs (i.e. direct labor and direct materials) of $126 per unit. Total units produced for the year ending December 31, 2022 are estimated to be 10,000 units. If the company desires to price its product at cost plus 50%, the sales price per unit would be which of the following amounts? $225 $192 $189
Krismuch Co. estimated that the company can sell 200,000 units of a product next period and earn a profit of P350,000 after tax of 30%. Fixed costs are estimated at P480,000 for the period. Variable costs are equal to two thirds of sales revenue. To meet this objective, what price must be charged for each unit of product?
Jasmine Inc. makes a single product that it sells for $25 each. Variable costs are $13 per unit and annual fixed costs total $30,000 per year. The company would like to realize operating income next year of $60,000. What level of sales in dollars must the company achieve to reach its target profit?
Harrison Co. expects to sell 200,000 units of its product next year, which would generate total sales of $17 million. Management predicts that pretax net income for next year will be $1,250,000 and that the contribution margin per unit will be $25. Use this information to compute next year’s total expected (a) variable costs and (b) fixed costs.