Question

Solomon Manufacturing Co. expects to make 31,200 chairs during the 2017 accounting period. The company made 3,500 chairs in January. Materials and labor costs for January were $16,500 and $25,400, respectively. Solomon produced 1,300 chairs in February. Material and labor costs for February were $9,700 and $13,500, respectively. The company paid the $842,400 annual rental fee on its manufacturing facility on January 1, 2017.

Assuming that Solomon desires to sell its chairs for cost plus 35 percent of cost, what price should be charged for the chairs produced in January and February? (Round intermediate calculations and final answers to 2 decimal places.)

Answer 1

Ans.	Particulars				January	February
	Material costs				16,500	9,700
	Labour costs				25,400	13,500
	Annual Rental fee ($842,400/12)				70,200	70,200
					112,100	93,400
	Add: Desired profit @35% of cost				39,235	32,690
					151,335	126,090
	Units Produced				3,500	1,300
	Price to be charged				43.24	96.99