Managerial Accounting
Managerial Accounting
7th Edition
ISBN: 9781260247886
Author: Wild
Publisher: MCG
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Chapter 10, Problem 3AA

Assume Samsung is designing a new smartphone. Each unit of this new phone is expected to require $285 of direct materials, $10 of direct labor, $30 or variable overhead, $5 of variable selling and administrative costs, and $20 of fixed selling and administrative costs.

Required

    1. If Samsung uses the variable cost method to set selling prices and plans a markup of 250% of variable costs, what is the expected selling price per unit of this new phone?
    2. If instead Samsung uses the total cost method to set selling prices and plans markup of 220% of total costs, what is the expected selling price per unit of this new phoe?

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Martinez Company's relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 units, its average costs per unit are as follows: Average Cost Per Unit Direct materials Direct labor $ 5.50 $3.00 Variable manufacturing overhead $ 1.50 Fixed manufacturing overhead $ 4.00 Fixed selling expense $2.50 Fixed administrative expense $2.00 Sales commissions $ Variable administrative expense $0.50 For financial accounting purposes, what is the total amount of product costs incurred to make 10,000 units?
Gross profit? & General Account
Financial accounting question

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Managerial Accounting

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