Question

Product Cost Concept of Product Pricing Willis Products Inc. uses the product cost concept of applying...

Product Cost Concept of Product Pricing

Willis Products Inc. uses the product cost concept of applying the cost-plus approach to product pricing. The costs of producing and selling 3,000 units of medical tablets are as follows:

Variable costs per unit: Fixed costs:
Direct materials $114 Factory overhead $120,000
Direct labor 42 Selling and admin. exp. 39,000
Factory overhead 35
Selling and admin. exp. 29
Total $220

Willis Products desires a profit equal to a 20% rate of return on invested assets of $252,000.

a. Determine the total manufacturing costs for the production and sale of 3,000 units.

Total Manufacturing Costs
Variable $
Fixed factory overhead   
Total $

Determine the cost amount per unit for the production and sale of 3,000 units.
$ per unit

b. Determine the product cost markup percentage per unit. Round your percentage answer to one decimal place.
%

c. Determine the selling price per unit. Use the rounded product cost markup percentage in your calculations, and round the amount of the markup to the nearest whole dollar.
$ per unit

Homework Answers

Answer #1
Total Manufacturing cost:
Material (3000 units @114) 342000
Labour (3000*42) 126000
Overheads (3000*35) 105000
Total Variable cost 573000
Total Fixed manufacturing cost 120000
Total Manufacturing cost: 693000
Total Markup requirred:
Selling and admin expense
Variable (3000*29) 87000
Fixed 39000
Total Selling and admin expense 126000
Target income 50400
($ 252000*20%)
Total Markup requirred: 176400
Total Manufacturing cost 693000
% of Markup on Product cost 25.45%
($ 176400*/693000 *100)
Total Manufacturing cost 693000
Add: markup @25.45% 176400
Total sales required 869400
Divide; Number of units 3000
Sselling price per unitt 289.8
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Product Cost Concept of Product Pricing Willis Products Inc. uses the product cost concept of applying...
Product Cost Concept of Product Pricing Willis Products Inc. uses the product cost concept of applying the cost-plus approach to product pricing. The costs of producing and selling 3,000 units of medical tablets are as follows: Variable costs per unit: Fixed costs: Direct materials $114 Factory overhead $120,000 Direct labor 42 Selling and admin. exp. 39,000 Factory overhead 35 Selling and admin. exp. 29 Total $220 Willis Products desires a profit equal to a 20% rate of return on invested...
Variable Cost Concept of Product Pricing Willis Products Inc. uses the product cost concept of applying...
Variable Cost Concept of Product Pricing Willis Products Inc. uses the product cost concept of applying the cost-plus approach to product pricing. The costs of producing and selling 7,000 units of medical tablets are as follows: Variable costs per unit: Fixed costs: Direct materials $109 Factory overhead $266,000 Direct labor 40 Selling and admin. exp. 91,000 Factory overhead 34 Selling and admin. exp. 27 Total $210 Willis Products desires a profit equal to a 25% rate of return on invested...
1. Smart Stream Inc. uses the total cost concept of applying the cost-plus approach to product...
1. Smart Stream Inc. uses the total cost concept of applying the cost-plus approach to product pricing. The costs of producing and selling 8,000 units of cellular phones are as follows: Variable costs: Fixed costs:     Direct materials $ 87 per unit     Factory overhead $349,300     Direct labor 40     Selling and admin. exp. 122,700     Factory overhead 26     Selling and admin. exp. 21          Total $174 per unit Smart Stream wants a profit equal to a 15% rate of return on invested assets of...
Problem Data XYZ Co. uses the product cost concept of applying the cost-plus approach to product...
Problem Data XYZ Co. uses the product cost concept of applying the cost-plus approach to product pricing. The costs of producing and selling 10,000 units are as follows: XYZ desires profit equal to a 30% rate of return on invested assets of $1,200,000. Variable Costs per unit: Fixed costs: Direct materials $                 150 Factory Overhead $         350,000 Direct labor 25 Selling & admin. expense $         140,000 Factory overhead 40 Selling & Admin expense 25 Total $                 240 Calculations 1. Compute...
Variable Cost Concept of Product Pricing Voice Com, Inc., produces and sells cellular phones. The costs...
Variable Cost Concept of Product Pricing Voice Com, Inc., produces and sells cellular phones. The costs of producing and selling 5,000 units of cellular phones are as follows: Variable costs: Fixed costs:     Direct materials $ 95 per unit     Factory overhead $235,500     Direct labor 44     Selling and admin. exp. 82,750     Factory overhead 29     Selling and admin. exp. 22      Total $190 per unit Voice Com desires a profit equal to a 15% rate of return on invested assets of $665,000. Assume that...
Hummingbird Company uses the product cost concept of applying the cost-plus approach to product pricing. The...
Hummingbird Company uses the product cost concept of applying the cost-plus approach to product pricing. The costs and expenses of producing 25,000 units of Product K are as follows: Variable costs:      Direct materials $2.50 Direct labor 4.25 Factory overhead 1.25 Selling and administrative expenses 0.50 Total 8.50 Fixed costs: Factory overhead $25,000 Selling and administrative expenses 17,000 Hummingbird desires a profit equal to a 5% rate of return on invested assets of $642,500. a. Determine the amount of desired...
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 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...
Variable Cost Method of Product Pricing Smart Stream Inc. uses the variable cost method of applying...
Variable Cost Method of Product Pricing Smart Stream Inc. uses the variable 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 admin. exp. 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...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT