Kirchoff.,manufactures a product with the following costs: Direct materials 18.00 Direct labor 11.90 Variable manufacturing overhead 2.10 Fixed manufacturing overhead 1,422,000 Variable SG&A expenses 3.60 Fixed SG&A expenses 1,540,500 The pricing are based on budgeted production and sales of 79,000 units per year. Required: Determine the selling price per unit, assuming a mark-up of 25% drsired under each of the following methods: 1. Differential cost 2. Minimum price allowed
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Kirchoff.,manufactures a product with the following costs:
Direct materials 18.00
Direct labor 11.90
Variable manufacturing
Fixed manufacturing overhead 1,422,000
Variable SG&A expenses 3.60
Fixed SG&A expenses 1,540,500
The pricing are based on budgeted production and sales of 79,000 units per year.
Required: Determine the selling price per unit, assuming a mark-up of 25% drsired under each of the following methods:
1. Differential cost
2. Minimum price allowed
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