Orion Inc. has determined the following per-unit amounts: Cost Component Direct materials Direct labor Variable overhead Fixed overhead Amount $28 $34 $20 $40 Variable selling and administrative $18 Fixed selling and administrative $50 Desired Return on Investment (ROI) $30 Required: • What is the target selling price using the variable-cost approach? • What is the cost base using the absorption-cost approach?

Orion Inc. has determined the following per-unit amounts: Cost Component Direct materials Direct labor Variable overhead Fixed overhead Amount $28 $34 $20 $40 Variable selling and administrative $18 Fixed selling and administrative $50 Desired Return on Investment (ROI) $30 Required: • What is the target selling price using the variable-cost approach? • What is the cost base using the absorption-cost approach?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 15EA: Using this information from Planters. Inc., what is the cost per unit under both variable and...

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