Question

Crystal Displays Inc. recently began production of a new product, flat panel displays, which required the...

Crystal Displays Inc. recently began production of a new product, flat panel displays, which required the investment of $1,500,000 in assets. The costs of producing and selling 5,000 units of flat panel displays are estimated as follows:

1

Variable costs per unit:

2

Direct materials

$119.00

3

Direct labor

32.00

4

Factory overhead

52.00

5

Selling and administrative expenses

36.00

6

Total variable cost per unit

$239.00

7

Fixed costs:

8

Factory overhead

$245,000.00

9

Selling and administrative expenses

147,000.00

Crystal Displays Inc. is currently considering establishing a selling price for flat panel displays. The president of Crystal Displays has decided to use the cost-plus approach to product pricing and has indicated that the displays must earn a 17% return on invested assets.

1. Determine the amount of desired profit from the production and sale of flat panel displays.

2. Assuming that the product cost method is used, determine (a) the cost amount per unit, (b) the markup percentage, and (c) the selling price of flat panel displays. Round your markup percentage and selling price to two decimal places.

Cost amount per unit
Markup percentage %
Selling price

3. (Appendix) Assuming that the total cost method is used, determine (a) the cost amount per unit, (b) the markup percentage, and (c) the selling price of flat panel displays. Round your markup percentage and selling price to two decimal places.

Cost amount per unit
Markup percentage %
Selling price

4. (Appendix) Assuming that the variable cost method is used, determine (a) the cost amount per unit, (b) the markup percentage, and (c) the selling price of flat panel displays. Round your markup percentage and selling price to two decimal places.

Cost amount per unit
Markup percentage %
Selling price

5. Comment on any additional considerations that could influence establishing the selling price for flat panel displays.

The cost-plus approach price computed above should be viewed as a general guideline for establishing long-run normal prices; however, other considerations, such as , could lead management to establish a different short-run price.

6a. Prepare a differential analysis of the proposed sale to Maple Leaf Visual Inc. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign. If there is no amount or an amount is zero, enter “0”. A colon (:) will automatically appear if required.

Differential Analysis

Reject (Alternative 1) or Accept (Alternative 2) Order

August 3

1

Reject Order

Accept Order

Differential Effect on Income

2

(Alternative 1)

(Alternative 2)

(Alternative 2)

3

4

5

6

6b. Based on the differential analysis in part (a), should the proposal be accepted?

The company is indifferent since the result is the same regardless of which alternative is chosen.

Yes

No

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Crystal Displays Inc. recently began production of a new product, flat panel displays, which required the...
Crystal Displays Inc. recently began production of a new product, flat panel displays, which required the investment of $1,500,000 in assets. The costs of producing and selling 5,000 units of flat panel displays are estimated as follows: 1 Variable costs per unit: 2 Direct materials $119.00 3 Direct labor 32.00 4 Factory overhead 52.00 5 Selling and administrative expenses 36.00 6 Total variable cost per unit $239.00 7 Fixed costs: 8 Factory overhead $245,000.00 9 Selling and administrative expenses 147,000.00...
Crystal Displays Inc. recently began production of a new product, flat panel displays, which required the...
Crystal Displays Inc. recently began production of a new product, flat panel displays, which required the investment of $1,500,000 in assets. The costs of producing and selling 5,000 units of flat panel displays are estimated as follows: 1 Variable costs per unit: 2 Direct materials $122.00 3 Direct labor 28.00 4 Factory overhead 48.00 5 Selling and administrative expenses 34.00 6 Total $232.00 7 Fixed costs: 8 Factory overhead $245,000.00 9 Selling and administrative expenses 148,000.00 Crystal Displays Inc. is...
JUST NUMBER 6 PLEASE Product Pricing using the Cost-Plus Approach Methods; Differential Analysis for Accepting Additional...
JUST NUMBER 6 PLEASE Product Pricing using the Cost-Plus Approach Methods; Differential Analysis for Accepting Additional Business Night Glow Inc. recently began production of a new product, the halogen light, which required the investment of $2,340,000 in assets. The costs of producing and selling 11,700 halogen lights are estimated as follows: Variable costs per unit: Fixed costs: Direct materials $117 Factory overhead $468,000 Direct labor 25 Selling and administrative expenses 234,000 Factory overhead 53 Selling and administrative expenses 46 Total...
#6 Product Cost Method of Product Costing Voice Com, Inc., uses the product cost method of...
#6 Product Cost Method of Product Costing Voice Com, Inc., uses the product cost method of applying the cost-plus approach to product pricing. The costs of producing and selling 4,970 units of cell phones are as follows: Variable costs: Fixed costs: Direct materials $60 per unit Factory overhead $198,500 Direct labor 37 Selling and admin. exp. 71,000 Factory overhead 22 Selling and admin. exp. 21 Total variable cost per unit $140 per unit Voice Com desires a profit equal to...
Product Cost Method of Product Costing Voice Com, Inc., uses the product cost method of applying...
Product Cost Method of Product Costing Voice Com, Inc., uses the product cost method of applying the cost-plus approach to product pricing. The costs of producing and selling 4,750 units of cell phones are as follows: Variable costs: Fixed costs: Direct materials $83 per unit Factory overhead $199,100 Direct labor 35 Selling and admin. exp. 68,400 Factory overhead 26 Selling and admin. exp. 22 Total variable cost per unit $166 per unit Voice Com desires a profit equal to a...
Product Cost Method of Product Costing Voice Com, Inc., uses the product cost method of applying...
Product Cost Method of Product Costing Voice Com, Inc., uses the product cost method of applying the cost-plus approach to product pricing. The costs of producing and selling 4,890 units of cell phones are as follows: Variable costs: Fixed costs: Direct materials $71 per unit Factory overhead $201,300 Direct labor 40 Selling and admin. exp. 71,600 Factory overhead 25 Selling and admin. exp. 18 Total variable cost per unit $154 per unit Voice Com desires a profit equal to a...
Product Cost Method of Product Pricing La Femme Accessories Inc. produces women's handbags. The cost of...
Product Cost Method of Product Pricing La Femme Accessories Inc. produces women's handbags. The cost of producing 1,300 handbags is as follows: Direct materials $14,800 Direct labor 7,000 Factory overhead 6,200 Total manufacturing cost $28,000 The selling and administrative expenses are $28,000. The management desires a profit equal to 15% of invested assets of $504,000. If required, round your answers to nearest whole number. a. Determine the amount of desired profit from the production and sale of 1,300 handbags. $...
Please show work Product Cost Method of Product Costing MyPhone, Inc., uses the product cost method...
Please show work Product Cost Method of Product Costing MyPhone, Inc., uses the product cost method of applying the cost-plus approach to product pricing. The costs of producing and selling 5,190 units of cell phones are as follows: Variable costs: Fixed costs: Direct materials $64 per unit Factory overhead $200,900 Direct labor 39 Selling and admin. exp. 70,600 Factory overhead 28 Selling and admin. exp. 18 Total variable cost per unit $149 per unit MyPhone desires a profit equal to...
Product Cost Method of Product Costing Voice Com, Inc., uses the product cost method of applying...
Product Cost Method of Product Costing Voice Com, Inc., uses the product cost method of applying the cost-plus approach to product pricing. The costs of producing and selling 5,250 units of cell phones are as follows: Variable costs: Fixed costs: Direct materials $89 per unit Factory overhead $200,400 Direct labor 30 Selling and admin. exp. 70,800 Factory overhead 26 Selling and admin. exp. 20 Total variable cost per unit $165 per unit Voice Com desires a profit equal to a...
Smart Stream Inc. uses the product cost method of applying the cost-plus approach to product pricing....
Smart Stream Inc. uses the product cost method of applying the cost-plus approach to product pricing. The costs of producing and selling 10,000 cell phones are as follows: Variable costs per unit: Fixed costs: Direct materials $150 Factory overhead $350,000 Direct labor 25 Selling and administrative expenses 140,000 Factory overhead 40 Selling and administrative expenses 25 Total variable cost per unit $240 Smart Stream desires a profit equal to a 30% return on invested assets of $1,200,000. a. Determine the...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT