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Stent Corporation needs to set a target price for its newly designed product EverReady. The following data relate to this new product. Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses Fixed selling and administrative expenses Target price $ LINK TO TEXT Per Unit $ 20 $ 40 $ 10 $ 1,250,400 The costs shown above are based on a budgeted volume of 80,000 units produced and sold each year. Stent uses cost-plus pricing methods to set its target selling price. Because some managers prefer absorption-cost pricing and others prefer variable-cost pricing, the accounting department provides information under both approaches using a markup of 50% on absorption cost and a markup of 80% on variable cost. $5 Compute the target price for one unit of EverReady using absorption-cost pricing. (Round answer to 2 decimal places, e.g. 10.50.) Target price Total $ $ 1,600,000 Compute the target price for one unit of EverReady using variable-cost pricing. (Round answer to 2 decimal places, e.g. 10.50.)

Stent Corporation needs to set a target price for its newly designed product EverReady. The following data relate to this new product. Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses Fixed selling and administrative expenses Target price $ LINK TO TEXT Per Unit $ 20 $ 40 $ 10 $ 1,250,400 The costs shown above are based on a budgeted volume of 80,000 units produced and sold each year. Stent uses cost-plus pricing methods to set its target selling price. Because some managers prefer absorption-cost pricing and others prefer variable-cost pricing, the accounting department provides information under both approaches using a markup of 50% on absorption cost and a markup of 80% on variable cost. $5 Compute the target price for one unit of EverReady using absorption-cost pricing. (Round answer to 2 decimal places, e.g. 10.50.) Target price Total $ $ 1,600,000 Compute the target price for one unit of EverReady using variable-cost pricing. (Round answer to 2 decimal places, e.g. 10.50.)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Stent Corporation needs to set a target price for its newly designed product EverReady. The following data relate to this new product. Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses Fixed selling and administrative expenses Target price Per Unit LINK TO TEXT $ 20 $ 40 $ 10 $5 Target price Total The costs shown above are based on a budgeted volume of 80,000 units produced and sold each year. Stent uses cost-plus pricing methods to set its target selling price. Because some managers prefer absorption-cost pricing and others prefer variable-cost pricing, the accounting department provides information under both approaches using a markup of 50% on absorption cost and a markup of 80% on variable cost. $ 1,600,000 Compute the target price for one unit of EverReady using absorption-cost pricing. (Round answer to 2 decimal places, e.g. 10.50.) $ 1,250,400 Compute the target price for one unit of EverReady using variable-cost pricing. (Round answer to 2 decimal places, e.g. 10.50.)
Transcribed Image Text:Stent Corporation needs to set a target price for its newly designed product EverReady. The following data relate to this new product. Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses Fixed selling and administrative expenses Target price Per Unit LINK TO TEXT $ 20 $ 40 $ 10 $5 Target price Total The costs shown above are based on a budgeted volume of 80,000 units produced and sold each year. Stent uses cost-plus pricing methods to set its target selling price. Because some managers prefer absorption-cost pricing and others prefer variable-cost pricing, the accounting department provides information under both approaches using a markup of 50% on absorption cost and a markup of 80% on variable cost. $ 1,600,000 Compute the target price for one unit of EverReady using absorption-cost pricing. (Round answer to 2 decimal places, e.g. 10.50.) $ 1,250,400 Compute the target price for one unit of EverReady using variable-cost pricing. (Round answer to 2 decimal places, e.g. 10.50.)
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