MANAGERIAL ACCOUNTING FOR MANAGERS EBOOK
6th Edition
ISBN: 9781264445615
Author: Noreen
Publisher: MCG
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Chapter 6A, Problem 6A.12P
1.
To determine
Introduction: The incremental profit earned on sales of each unit as a result of all associated variable cost being deducted from the price of the product is termed as the contribution margin.
To calculate: The unit product cost for remodeled product.
2.
To determine
Introduction: The incremental profit earned on sales of each unit as a result of all associated variable cost being deducted from the price of the product is termed as the contribution margin.
To calculate: The markup percentage on absorption cost for the remodeled
3.
To determine
Introduction: The incremental profit earned on sales of each unit as a result of all associated variable cost being deducted from the price of the product is termed as the contribution margin.
The Selling price company should establish mark up percentage on absorption cost.
4.
To determine
Introduction: The incremental profit earned on sales of each unit as a result of all associated variable cost being deducted from the price of the product is termed as the contribution margin.
The
5.
To determine
Introduction: The incremental profit earned on sales of each unit as a result of all associated variable cost being deducted from the price of the product is termed as the contribution margin.
The revised selling price at lower sales level.
6.
To determine
Introduction: The incremental profit earned on sales of each unit as a result of all associated variable cost being deducted from the price of the product is termed as the contribution margin.
The revised selling price and profit at lower sales level
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Absorption Costing Approach to Cost-Plus Pricing
Aldean Company wants to use absorption cost-plus pricing to set the selling price on a new product. The company plans to invest $200,000 in operating assets to produce and sell 16,000 units. Its required return on investment (ROI) in its operating assets is 18%. The accounting department has provided cost estimates for the new product as shown below:
Required:
1. What is the unit product cost for the new product?
2. What is the markup percentage on absorption cost for the new product?
3. What selling price would the company establish for its new product using a markup percentage on absorption cost? (Round your answer to the nearest penny.)
please answer in text form and in proper format answer with must explanation , calculation for each part and steps clearly
Diff Analysis & Product Pricing:
Chapter 6A Solutions
MANAGERIAL ACCOUNTING FOR MANAGERS EBOOK
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- Sales Needed to Earn Target Income Chillmax Company plans to sell 3,500 pairs of shoes at 60 each in the coming year. Variable cost is 35% of the sales price; contribution margin is 65% of the sales price. Total fixed cost equals 78,000 (includes fixed factory overhead and fixed selling and administrative expense). Required: 1. Calculate the sales revenue that Chillmax must make to earn operating income of 81,900 by using the point in sales equation. 2. Check your answer by preparing a contribution margin income statement based on the sales dollars calculated in Requirement 1.arrow_forwardMartin Company uses the absorption costing approach to cost-plus pricing. It is considering the introduction of a new product. To determine a selling price, the company has gathered the following information: Number of units to be produced and sold each year. 10,500 24 32 Unit product cost Estimated annual selling and administrative expenses Estimated investment required by the company Desired return on investment (ROI) 34,800 $ 690,000 ok 12% nt Required: 1. Compute the markup percentage on absorption cost required to achieve the desired ROI. 2. Compute the selling price per unit. (Do not round intermediate calculations. Round your answer to 2 decimal places.) nt ences 1. Markup percentage on absorption cost 2. Selling price per unit Prev 1 of 3 Next >arrow_forwardPlease help me with show all calculation thankuarrow_forward
- Target Costing Basic Motor Corporation uses target costing. Assume that Basic marketing personnel estimate that the competitive selling price for the QuikCar in the upcoming model year will need to be $23,900. Assume further that the QuikCar's total unit cost for the upcoming model year is estimated to be $19,400 and that Basic requires a 20% profit margin on selling price (which is equivalent to a 25% markup on total cost). What price will Basic establish for the QuikCar for the upcoming model year? $fill in the blankarrow_forwardprovide answerarrow_forwardProvide Solutions about this Question please solve it with Step by steparrow_forward
- i need the answer quicklyarrow_forwardAbsorption Costing Approach to Cost-Plus Pricing Currington Company wants to use absorption cost-plus pricing to set the selling price on a newly remodeled product. The company plans to invest $150,000 in operating assets to produce and sell 12,000 units. Its required return on investment (ROI) in its operating assets is 16%. The accounting department has provided cost estimates for the new product as follows: Required: 1. What is the unit product cost for the remodeled product? 2. What is the markup percentage on absorption cost for the remodeled product? 3. What selling price would the company establish for its remolded product using a markup percentage on absorption cost? 4. Suppose the company actually sold only 10,000 units (instead of its planned sales volume of 12,000 units) at the selling price that you derived in requirement 3. What ROI did the company actually earn at this lower sales volume? 5. Assume that the company wants to raise the price of its newly remodeled product…arrow_forward! Required information Use the following information for the Exercises below. (Algo) [The following information applies to the questions displayed below.] Hudson Company reports the following contribution margin income statement. Sales (9,700 units at $280 each) Variable costs (9,700 units at $210 each) Contribution margin Fixed costs Income HUDSON COMPANY Contribution Margin Income Statement For Year Ended December 31 Exercise 18-19 (Algo) Evaluating strategies-new machine LO C2 The company is considering buying a new machine that will increase its fixed costs by $41,000 per year and decrease its variable costs by $10 per unit. Prepare a contribution margin income statement for the next year assuming the company purchases this machine. HUDSON COMPANY Contribution Margin Income Statement For Year Ended December 31 Sales Variable costs Contribution margin Fixed costs Income/Loss $ 2,716,000 2,037,000 679,000 441,000 $ 238,000arrow_forward
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