TB Problem Qu. 12-120 (Algo) Quamma Corporation makes a... Quamma Corporation makes a product that has the following costs: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses Fixed selling and administrative expenses Per Unit $16.90 $14.50 $ 1.80 $ 3.50 Per Year $726,000 $558,000 The company uses the absorption costing approach to cost-plus pricing as described in the text. The pricing calculations a budgeted production and sales of 33.000 units per year
TB Problem Qu. 12-120 (Algo) Quamma Corporation makes a... Quamma Corporation makes a product that has the following costs: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses Fixed selling and administrative expenses Per Unit $16.90 $14.50 $ 1.80 $ 3.50 Per Year $726,000 $558,000 The company uses the absorption costing approach to cost-plus pricing as described in the text. The pricing calculations a budgeted production and sales of 33.000 units per year
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Hansha ben
Transcribed Image Text:TB Problem Qu. 12-120 (Algo) Quamma Corporation makes a...
Quamma Corporation makes a product that has the following costs:
Direct materials
Direct labor
Variable manufacturing overhead
Fixed manufacturing overhead
Variable selling and administrative expenses
Fixed selling and administrative expenses
Per Unit
$16.90
$14.50
$ 1.80
$ 3.50
a. Markup percentage on absorption cost
b. Selling price
Per Year
%
$726,000
The company uses the absorption costing approach to cost-plus pricing as described in the text. The pricing calculations are based on
budgeted production and sales of 33,000 units per year.
The company has invested $580,000 in this product and expects a return on investment of 16%.
$558,000
Required:
a. Compute the markup on absorption cost. (Round your intermediate and final answer to 2 decimal places.)
b. Compute the selling price of the product using the absorption costing approach. (Round your intermediate and final answer to 2
decimal places.)
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