Product Cost Method of Product Pricing La Femme Accessories Inc. produces women's handbags. The cost of producing 800 handbags is as follows: Direct materials $18,000 Direct labor 8,500 Factory overhead 5,500 Total manufacturing cost $32,000 The selling and administrative expenses are $17,000. The management desires a profit equal to 22% of invested assets of $250,000. a. Determine the amount of desired profit from the production and sale of 800 handbags. $fill in the blank 1 b. Determine the product cost per unit for the production of 800 handbags. $fill in the blank 2 c. Determine the product cost markup percentage for handbags. fill in the blank 3 % d. Determine the selling price of handbags. Cost $fill in the blank 4per unit Markup $fill in the blank 5per unit Selling price $fill in the blank 6per unit
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Product Cost Method of Product Pricing
La Femme Accessories Inc. produces women's handbags. The cost of producing 800 handbags is as follows:
Direct materials $18,000 Direct labor 8,500 Factory overhead 5,500 Total manufacturing cost $32,000 The selling and administrative expenses are $17,000. The management desires a profit equal to 22% of invested assets of $250,000.
a. Determine the amount of desired profit from the production and sale of 800 handbags.
$fill in the blank 1b. Determine the product cost per unit for the production of 800 handbags.
$fill in the blank 2c. Determine the product cost markup percentage for handbags.
fill in the blank 3 %d. Determine the selling price of handbags.
Cost $fill in the blank 4per unit Markup $fill in the blank 5per unit Selling price $fill in the blank 6per unit
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