The West Company’s cost structure for a certain items at a level of 20,000 units per month are as follows: Manufacturing Costs: Direct Material 1.00 Direct Labor 1.20 Variable indirect cost .80 Fixed indirect cost .50 Selling and other: Variable 1.50 Fixed .90 Required: Determine the selling price if the company is planning to set up a selling price with a mark-up of 60% based on prime costs.
The West Company’s cost structure for a certain items at a level of 20,000 units per month are as follows: Manufacturing Costs: Direct Material 1.00 Direct Labor 1.20 Variable indirect cost .80 Fixed indirect cost .50 Selling and other: Variable 1.50 Fixed .90 Required: Determine the selling price if the company is planning to set up a selling price with a mark-up of 60% based on prime costs.
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter3: Cost Behavior And Cost Forecasting
Section: Chapter Questions
Problem 16DQ
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Question
The West Company’s cost structure for a certain items at a level of 20,000 units per month are as follows:
Manufacturing Costs:
Direct Material 1.00
Direct Labor 1.20
Variable indirect cost .80
Fixed indirect cost .50
Selling and other:
Variable 1.50
Fixed .90
Required:
Determine the selling price if the company is planning to set up a selling price with a mark-up of 60% based on prime costs.
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