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Product Pricing: Two Products Quality Data manufactures two products, CDs and DVDs, both on the same assembly lines and packaged 10 disks per pack. The predicted sales are 400,000 packs of CDs and 500,000 packs of DVDs. The predicted costs for the year 2014 are as follows: Variable Costs Fixed Costs Materials Other Each product uses 50 percent of the materials costs. Based on manufacturing time, 40 percent of the other costs are assigned to the CDs, and 60 percent of the other costs are assigned to the DVDs. The management of Quality Data desires an annual prof of $100,000. (a) What price should Quality Data charge for each disk pack if management believes the DVDs sell for 20 percent more than the CDs? Round answers to the nearest cent. CDs S DVDs $ $200,000 $500,000 250,000 800.000 DVDs $ x (b) What is the total profit per product using the selling prices determined in part (a)? Use negative signs with answers, if appropriate. CDs S x

Product Pricing: Two Products Quality Data manufactures two products, CDs and DVDs, both on the same assembly lines and packaged 10 disks per pack. The predicted sales are 400,000 packs of CDs and 500,000 packs of DVDs. The predicted costs for the year 2014 are as follows: Variable Costs Fixed Costs Materials Other Each product uses 50 percent of the materials costs. Based on manufacturing time, 40 percent of the other costs are assigned to the CDs, and 60 percent of the other costs are assigned to the DVDs. The management of Quality Data desires an annual prof of $100,000. (a) What price should Quality Data charge for each disk pack if management believes the DVDs sell for 20 percent more than the CDs? Round answers to the nearest cent. CDs S DVDs $ $200,000 $500,000 250,000 800.000 DVDs $ x (b) What is the total profit per product using the selling prices determined in part (a)? Use negative signs with answers, if appropriate. CDs S x

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Product Pricing: Two Products Quality Data manufactures two products, CDs and DVDs, both on the same assembly lines and packaged 10 disks per pack. The predicted sales are 400,000 packs of CDs and 500,000 packs of DVDs. The predicted costs for the year 2014 are as follows: Variable Costs Fixed Costs $200,000 $500,000 800,000 250,000 Materials Other Each product uses 50 percent of the materials costs. Based on manufacturing time, 40 percent of the other costs are assigned to the CDs, and 60 percent of the other costs are assigned to the DVDs. The management of Quality Data desires an annual profit of $100,000. (a) What price should Quality Data charge for each disk pack if management believes the DVDs sell for 20 percent more than the CDs? Round answers to the nearest cent. CDs $ DVDs $ (b) What is the total profit per product using the selling prices determined in part (a)? Use negative signs with answers, if appropriate. CDs $ DVDs $ x Check x
Transcribed Image Text:Product Pricing: Two Products Quality Data manufactures two products, CDs and DVDs, both on the same assembly lines and packaged 10 disks per pack. The predicted sales are 400,000 packs of CDs and 500,000 packs of DVDs. The predicted costs for the year 2014 are as follows: Variable Costs Fixed Costs $200,000 $500,000 800,000 250,000 Materials Other Each product uses 50 percent of the materials costs. Based on manufacturing time, 40 percent of the other costs are assigned to the CDs, and 60 percent of the other costs are assigned to the DVDs. The management of Quality Data desires an annual profit of $100,000. (a) What price should Quality Data charge for each disk pack if management believes the DVDs sell for 20 percent more than the CDs? Round answers to the nearest cent. CDs $ DVDs $ (b) What is the total profit per product using the selling prices determined in part (a)? Use negative signs with answers, if appropriate. CDs $ DVDs $ x Check x
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