Managerial Accounting: Tools for Business Decision Making
Managerial Accounting: Tools for Business Decision Making
7th Edition
ISBN: 9781119034681
Author: Weygandt
Publisher: WILEY
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Chapter 8, Problem 8.18E

(a)

To determine

Total cost pricing: It is an approach to fix a price of a product that includes all the costs such as all variable costs and fixed costs associated for manufacturing a product.

To determine: The total cost per unit of a mechanical alligator

(b)

To determine

Return on investment (ROI): This financial ratio evaluates how efficiently the assets are used in earning income from operations. So, ROI is a tool used to measure and compare the performance of a units or divisions or a companies.

Formula for desired ROI per unit:

Desired ROI per unit = Desired ROI percentage×Amount investedNumber of units produced

To determine: The desired ROI per session for Corporation S

(c)

To determine

Markup percentage: The percentage of return on investment (ROI) achieved per unit over the total cost of production per unit, is referred to as markup percentage.

Formula for mark-up percentage, under absorption-cost pricing approach:

Mark-up percentage = {Desired ROI per unit+Selling and administrative expenses per unit}Manufacturing cost per unit

Absorption-cost Pricing: It is an approach to fix a price of a product that includes only the variable and fixed manufacturing overhead costs incurred for manufacturing a product.

To compute: The markup percentage for mechanical alligators of Corporation S, under absorption-cost pricing approach

(d)

To determine

Variable-cost pricing: This pricing approach is used by the companies to set the target selling price based on all variable manufacturing costs, but fixed costs, plus desired profit.

Markup percentage: The percentage of return on investment (ROI) achieved per unit over the total cost of production per unit, is referred to as markup percentage.

Formula for mark-up percentage, under variable-cost pricing approach:

Mark-up percentage = {Desired ROI per unit+Fixed cost per unit}Variable cost per unit

To compute: The markup percentage for mechanical alligators of Corporation S, under variable-cost pricing approach

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Chapter 8 Solutions

Managerial Accounting: Tools for Business Decision Making

Ch. 8 - What is a transfer price? Why is determining a...Ch. 8 - When setting a transfer price, what objective(s)...Ch. 8 - What are the three approaches for determining...Ch. 8 - Prob. 14QCh. 8 - What is the general formula for determining the...Ch. 8 - When determining the minimum transfer price, what...Ch. 8 - In what circumstances will a negotiated transfer...Ch. 8 - What costs are excluded from the cost base when...Ch. 8 - Prob. 19QCh. 8 - Prob. 20QCh. 8 - Onega Company manufactures computer hard drives....Ch. 8 - Mussatto Corporation produces snowboards. The...Ch. 8 - Jaymes Corporation produces high-performance...Ch. 8 - Momies Corporation produces microwave ovens. The...Ch. 8 - During the current year, Chudrick Corporation...Ch. 8 - Rooney Small Engine Repair charges 42 per hour of...Ch. 8 - Prob. 8.7BECh. 8 - Use the data from BE8-7 but assume that the...Ch. 8 - Use the data from BE8-7 but assume that the units...Ch. 8 - Using the data in BE8-4, compute the markup...Ch. 8 - Using the data in BH8-4, compute the markup...Ch. 8 - Maize Water is considering introducing a water...Ch. 8 - Gundy Corporation produces area rugs. The...Ch. 8 - Presented below are data relating to labor for...Ch. 8 - The fastener division of Southern Fasteners...Ch. 8 - Mesa Cheese Company has developed a new cheese...Ch. 8 - Eckert Company is involved in producing and...Ch. 8 - Leno Company makes swimsuits and sells these suits...Ch. 8 - Kaspar Corporation makes a commercial-grade...Ch. 8 - Schopp Corporation makes a mechanical stuffed...Ch. 8 - Almas Recording Studio rents studio time to...Ch. 8 - Gibbs Corporation produces industrial robots for...Ch. 8 - Second Chance Welding rebuilds spot welders for...Ch. 8 - Rey Custom Electronics (RCE) sells and installs...Ch. 8 - Wassons Classic Cars restores classic automobiles...Ch. 8 - Chen Companys Small Motor Division manufactures a...Ch. 8 - The Cycle Division of Ayala Company has the...Ch. 8 - Prob. 8.13ECh. 8 - The Bathtub Division of Kirk Plumbing Corporation...Ch. 8 - The Appraisal Department of Jean Bank performs...Ch. 8 - Crede Inc. has two divisions. Division A makes and...Ch. 8 - Prob. 8.17ECh. 8 - Prob. 8.18ECh. 8 - Rap Corporation produces outdoor portable...Ch. 8 - Information for Gibbs Corporation is given in...Ch. 8 - National Corporation needs to set a target price...Ch. 8 - Prob. 8.2APCh. 8 - Suttons Electronic Repair Shop has budgeted the...Ch. 8 - Word Wizard is a publishing company with a number...Ch. 8 - Prob. 8.5APCh. 8 - Comm Devices (CD) is a division of Worldwide...Ch. 8 - Prob. 8.7APCh. 8 - Anderson Windows Inc. is in the process of setting...Ch. 8 - CURRENT DESIGNS As a service to its customers,...Ch. 8 - Prob. 8.1BYPCh. 8 - Construction on the Bonita Full-Service Car Wash...Ch. 8 - Real-World Focus Merck Co., Inc. is a global,...Ch. 8 - Prob. 8.5BYPCh. 8 - Prob. 8.6BYPCh. 8 - The January 2011 issue of Strategic Finance...
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