There are many ways to decide the price of the product. One of them is – Total cost method Under total cost method, the selling price of the product is decided by using the total direct material, total direct labor, total variable overhead , fixed overhead costs, fixed selling and administrative costs and the units expected to be sold. First, the total cost per unit is calculated Total cost per unit = (Total direct material + total direct labor + total variable overheads) + F i x e d o v e r h e a d c o s t s + F i x e d s e l l i n g a n d a d m i n i s t r a t i v e c o s t s T o t a l e x p e c t e d u n i t s t o s e l l This is how total cost per unit is calculated. Then the mark-up percentage is added to total costs per unit to know the selling price per unit. Now, the selling price is decided as under – S e l l i n g p r i c e p e r u n i t = T o t a l cos t p e r u n i t + ( T o t a l cost per unit X M a r k u p p e r c e n t a g e ) S e l l i n g p r i c e p e r u n i t = T o t a l cost per unit + T o t a l M a r k u p This is how, we calculate the selling price per unit in case of total costs method. To compute: Selling price using the total costs method.

Question

Want to see the full answer?

Answer 1

Question

Chapter 25, Problem 30QS

To determine

Concept Introduction:

There are many ways to decide the price of the product. One of them is –

Total cost method

Under total cost method, the selling price of the product is decided by using the total direct material, total direct labor, total variable overhead, fixed overhead costs, fixed selling and administrative costs and the units expected to be sold.

First, the total cost per unit is calculated

$Total cost per unit = \frac{\begin{array}{l} (Total direct material + total direct labor + total variable overheads) \\ + F i x e d o v e r h e a d c o s t s + F i x e d s e l l i n g a n d a d m i n i s t r a t i v e c o s t s \end{array}}{T o t a l e x p e c t e d u n i t s t o s e l l}$

This is how total cost per unit is calculated. Then the mark-up percentage is added to total costs per unit to know the selling price per unit.

Now, the selling price is decided as under –

$\begin{array}{l} S e l l i n g p r i c e p e r u n i t = T o t a l \cos t p e r u n i t + (T o t a l cost per unit X M a r k u p p e r c e n t a g e) \\ S e l l i n g p r i c e p e r u n i t = T o t a l cost per unit + T o t a l M a r k u p \end{array}$

This is how, we calculate the selling price per unit in case of total costs method.

To compute:

Selling price using the total costs method.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Subject. General Account

Compute the amount of direct materials used during September

Can you explain the correct approach to solve this general accounting question?

Answer 2

Question

Chapter 25, Problem 30QS

To determine

Concept Introduction:

There are many ways to decide the price of the product. One of them is –

Total cost method

Under total cost method, the selling price of the product is decided by using the total direct material, total direct labor, total variable overhead, fixed overhead costs, fixed selling and administrative costs and the units expected to be sold.

First, the total cost per unit is calculated

$Total cost per unit = \frac{\begin{array}{l} (Total direct material + total direct labor + total variable overheads) \\ + F i x e d o v e r h e a d c o s t s + F i x e d s e l l i n g a n d a d m i n i s t r a t i v e c o s t s \end{array}}{T o t a l e x p e c t e d u n i t s t o s e l l}$

This is how total cost per unit is calculated. Then the mark-up percentage is added to total costs per unit to know the selling price per unit.

Now, the selling price is decided as under –

$\begin{array}{l} S e l l i n g p r i c e p e r u n i t = T o t a l \cos t p e r u n i t + (T o t a l cost per unit X M a r k u p p e r c e n t a g e) \\ S e l l i n g p r i c e p e r u n i t = T o t a l cost per unit + T o t a l M a r k u p \end{array}$

This is how, we calculate the selling price per unit in case of total costs method.

To compute:

Selling price using the total costs method.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 25, Problem 30QS

To determine

Concept Introduction:

There are many ways to decide the price of the product. One of them is –

Total cost method

Under total cost method, the selling price of the product is decided by using the total direct material, total direct labor, total variable overhead, fixed overhead costs, fixed selling and administrative costs and the units expected to be sold.

First, the total cost per unit is calculated

$Total cost per unit = \frac{\begin{array}{l} (Total direct material + total direct labor + total variable overheads) \\ + F i x e d o v e r h e a d c o s t s + F i x e d s e l l i n g a n d a d m i n i s t r a t i v e c o s t s \end{array}}{T o t a l e x p e c t e d u n i t s t o s e l l}$

This is how total cost per unit is calculated. Then the mark-up percentage is added to total costs per unit to know the selling price per unit.

Now, the selling price is decided as under –

$\begin{array}{l} S e l l i n g p r i c e p e r u n i t = T o t a l \cos t p e r u n i t + (T o t a l cost per unit X M a r k u p p e r c e n t a g e) \\ S e l l i n g p r i c e p e r u n i t = T o t a l cost per unit + T o t a l M a r k u p \end{array}$

This is how, we calculate the selling price per unit in case of total costs method.

To compute:

Selling price using the total costs method.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 25, Problem 30QS

To determine

Concept Introduction:

There are many ways to decide the price of the product. One of them is –

Total cost method

Under total cost method, the selling price of the product is decided by using the total direct material, total direct labor, total variable overhead, fixed overhead costs, fixed selling and administrative costs and the units expected to be sold.

First, the total cost per unit is calculated

$Total cost per unit = \frac{\begin{array}{l} (Total direct material + total direct labor + total variable overheads) \\ + F i x e d o v e r h e a d c o s t s + F i x e d s e l l i n g a n d a d m i n i s t r a t i v e c o s t s \end{array}}{T o t a l e x p e c t e d u n i t s t o s e l l}$

This is how total cost per unit is calculated. Then the mark-up percentage is added to total costs per unit to know the selling price per unit.

Now, the selling price is decided as under –

$\begin{array}{l} S e l l i n g p r i c e p e r u n i t = T o t a l \cos t p e r u n i t + (T o t a l cost per unit X M a r k u p p e r c e n t a g e) \\ S e l l i n g p r i c e p e r u n i t = T o t a l cost per unit + T o t a l M a r k u p \end{array}$

This is how, we calculate the selling price per unit in case of total costs method.

To compute:

Selling price using the total costs method.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter 25, Problem 30QS

To determine

Concept Introduction:

There are many ways to decide the price of the product. One of them is –

Total cost method

Under total cost method, the selling price of the product is decided by using the total direct material, total direct labor, total variable overhead, fixed overhead costs, fixed selling and administrative costs and the units expected to be sold.

First, the total cost per unit is calculated

$Total cost per unit = \frac{\begin{array}{l} (Total direct material + total direct labor + total variable overheads) \\ + F i x e d o v e r h e a d c o s t s + F i x e d s e l l i n g a n d a d m i n i s t r a t i v e c o s t s \end{array}}{T o t a l e x p e c t e d u n i t s t o s e l l}$

This is how total cost per unit is calculated. Then the mark-up percentage is added to total costs per unit to know the selling price per unit.

Now, the selling price is decided as under –

$\begin{array}{l} S e l l i n g p r i c e p e r u n i t = T o t a l \cos t p e r u n i t + (T o t a l cost per unit X M a r k u p p e r c e n t a g e) \\ S e l l i n g p r i c e p e r u n i t = T o t a l cost per unit + T o t a l M a r k u p \end{array}$

This is how, we calculate the selling price per unit in case of total costs method.

To compute:

Selling price using the total costs method.

Answer 6

Chapter 25, Problem 30QS

To determine

Concept Introduction:

There are many ways to decide the price of the product. One of them is –

Total cost method

Under total cost method, the selling price of the product is decided by using the total direct material, total direct labor, total variable overhead, fixed overhead costs, fixed selling and administrative costs and the units expected to be sold.

First, the total cost per unit is calculated

$Total cost per unit = \frac{\begin{array}{l} (Total direct material + total direct labor + total variable overheads) \\ + F i x e d o v e r h e a d c o s t s + F i x e d s e l l i n g a n d a d m i n i s t r a t i v e c o s t s \end{array}}{T o t a l e x p e c t e d u n i t s t o s e l l}$

This is how total cost per unit is calculated. Then the mark-up percentage is added to total costs per unit to know the selling price per unit.

Now, the selling price is decided as under –

$\begin{array}{l} S e l l i n g p r i c e p e r u n i t = T o t a l \cos t p e r u n i t + (T o t a l cost per unit X M a r k u p p e r c e n t a g e) \\ S e l l i n g p r i c e p e r u n i t = T o t a l cost per unit + T o t a l M a r k u p \end{array}$

This is how, we calculate the selling price per unit in case of total costs method.

To compute:

Selling price using the total costs method.

Answer 7

Chapter 25, Problem 30QS

To determine

Concept Introduction:

There are many ways to decide the price of the product. One of them is –

Total cost method

Under total cost method, the selling price of the product is decided by using the total direct material, total direct labor, total variable overhead, fixed overhead costs, fixed selling and administrative costs and the units expected to be sold.

First, the total cost per unit is calculated

$Total cost per unit = \frac{\begin{array}{l} (Total direct material + total direct labor + total variable overheads) \\ + F i x e d o v e r h e a d c o s t s + F i x e d s e l l i n g a n d a d m i n i s t r a t i v e c o s t s \end{array}}{T o t a l e x p e c t e d u n i t s t o s e l l}$

This is how total cost per unit is calculated. Then the mark-up percentage is added to total costs per unit to know the selling price per unit.

Now, the selling price is decided as under –

$\begin{array}{l} S e l l i n g p r i c e p e r u n i t = T o t a l \cos t p e r u n i t + (T o t a l cost per unit X M a r k u p p e r c e n t a g e) \\ S e l l i n g p r i c e p e r u n i t = T o t a l cost per unit + T o t a l M a r k u p \end{array}$

This is how, we calculate the selling price per unit in case of total costs method.

To compute:

Selling price using the total costs method.

Answer 8

Expert Solution & Answer

Answer 9

Expert Solution & Answer

Answer 10

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 11

Ch. 25 - Prob. 1DQ Ch. 25 - What is capital budgeting?Ch. 25 - Prob. 3DQ Ch. 25 - Prob. 4DQ Ch. 25 - Prob. 5DQ Ch. 25 - Prob. 6DQ Ch. 25 - Prob. 7DQ Ch. 25 - Prob. 8DQ Ch. 25 - Prob. 9DQ Ch. 25 - Prob. 10DQ

Want to see the full answer?

Chapter 25 Solutions