Bythel Corporation uses the product cost concept of product pricing. Below is cost information for the production and sale of 40,000 units of its sole product. Bythel desires a profit equal to a 7.5% rate of return on invested assets of $800,000.
Fixed factory overhead cost $52,000
Fixed selling and administrative costs $35,000
Variable direct materials cost per unit $3.50
Variable direct labor cost per unit $7.25
Variable factory overhead cost per unit $2.35
Variable selling and administrative cost per unit $1.00
The dollar amount of desired profit from the production and sale of the company's product is
Particulars | Amount |
Direct Material per unit | 3.50 |
Direct Labour cost per unit | 7.25 |
Variable Factory overhead cost per unit | 2.35 |
Variable Selling and administrative cost per unit | 1.00 |
Fixed Factory overhead cost per unit(Total fixed cost/ no of units) | 1.30 |
Fixed Selling and administrative cost per unit (Total fixed cost/ no of units) | 0.88 |
16.28 |
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