Haverhill Electronics (HE) has offered to supply the county government with one model of its security screening device at "cost plus 25percent." HE operates a manufacturing plant that can produce 22.000 devices per year, but it normally produces 20,000. The costs toproduce 20.000 devices follow.Production costs:MaterialsLaborSupplies and other costs that will vary with productionIndirect cost that will not vary with productionVariable marketing costsAdministrative costs (will not vary with production)TotalsMaterialsLaborSupplies and other costs that will vary with productionCost perDeviceTotal Cost$ 3,800,000.004,800,000.001,440,000.001,440,000.00680,000.0015,040,000.0027,200,000.00 $ 1,360.00Based on these data, company management expects to receive $1,700.00 (= $1,360.00x 125 percent) per device for those sold on thiscontract. After completing 200 devices, the company sent a bill (invoice) to the government for $27,200,000 (= 200 devices x$1,700.00 per device).The president of the company received a call from a county auditor, who stated that the per device cost should be as follows.$190.00240.0072.00$ 502.00Option AOption BOption COption D$ 190.00240.00Per DeviceCost Basis72.0072.00Therefore, the price per device should be $627.50 (= $502.00 x 125 percent). The county government ignored marketing costsbecause the contract bypassed the usual selling channels.RecommendedPrice per Device34.00752.00Required:For each of the four situations, calculate the cost basis per device based on the information shown above.Note: Round Intermediate calculations and final answers to 2 decimal places.Options:A. Only the differential production costs could be considered as the cost basis.B. The total cost per device for normal production of 20.000 devices could be used as the cost basis.C. The total cost per device for production of 22,000 devices, excluding marketing costs, could be used as the cost basis.D. The total cost per device for production of 22,000 devices, including marketing costs, could be used as the cost basis.

There are methods of the selection of the price (selling price) and usually it is logically based…

Answered: Required: For each of the four…

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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If variable manufacturing costs are $13 per unit and total fixed manufacturing costs are $626,400, what is the manufacturing cost per unit if: a. 7,200 units are manufactured and the company uses the variable costing concept?$fill in the blank 1 b. 8,700 units are manufactured and the company uses the variable costing concept?$fill in the blank 2 c. 7,200 units are manufactured and the company uses the absorption costing concept?$fill in the blank 3 d. 8,700 units are manufactured and the company uses the absorption costing concept?$fill in the blank 4
Jamison Company uses the total cost method of applying the cost-plus approach to product pricing. Jamison produces and sells Product X at a total cost of $800 per unit, of which $540 is product cost and $260 is selling and administrative expenses. In addition, the total cost of $800 is made up of $460 variable cost and $340 fixed cost. The desired profit is $168 per unit. Determine the markup percentage on total cost. %
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Complete the table below for contribution margin per unit, total contribution margin, and contribution margin ratio: E (Click the icon to view the table.) Compute the missing information, starting with scenario A, then for scenarios B and C. (Enter the contribution margin ratio to nearest percent, X%.) A Number of units 1,510 units Sale price per unit $ 1,600 Variable costs per unit 1, 120 Calculate: Contribution margin per unit Total contribution margin Contribution margin ratio Data Table A Number of units 1,510 units 14,390 units 2,450 units Sale price per unit 1,600 $ 4.400 5,000 Variable costs per unit 1,120 880 3,750 Calculate: Contribution margin per unit Total contribution margin Contribution margin ratio Print Done Enter any number in the edit fields and then click Check Answer. parts remaining Clear All Final Check
Required:1. Compute the contribution margin per unit from (a) using the new material and (b) using the new material and increasing the selling price. (Round your answers to 2 decimal places.) All of the empty spaces needs numbers, please use the same format at the photos
a. What is the traditional unit product cost for the deluxe model now? (round your intermediate calculations and final answer to 2 decimal places.) b. What is the traditional unit product cost for the tourist model? (Round your intermediate calculations and final answer to 2 deimal places) c. What is the ABC unit product cost for the deluxe model now? (Round your intermediate calculations and final answer to 2 decimal places.) d. What is the ABC product cost for the tourist model? (Round your intermediate calculations and final answer to 2 decimal places.)
You have been asked to decide about one of two mutually exclusive alternatives (A & B). The following table gives the initial costs, annual savings in labor costs, and the expected life of two pieces of equipment. Plot PW vs. i for each equipment on the same graph and identify the AAIRR from the graph (i for the intersection). Then, highlight the corresponding value of i in yellow in your spreadsheet. High-cost Equipment (A) Low-cost Equipment (B) Initial Cost $137,910 $100,000 Savings in Labor Costs $42,000 / year $32,000 / year Life 5 years 5 years
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