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arianapowell56
26.08.2020 •
Business
Quamma Corporation makes a product that has the following costs: Per UnitPer Year Direct materials$18.50 Direct labor$16.10 Variable manufacturing overhead$3.40 Fixed manufacturing overhead $826,000 Variable selling and administrative expenses$5.10 Fixed selling and administrative expenses $574,000 The company uses the absorption costing approach to cost-plus pricing as described in the text. The pricing calculations are based on budgeted production and sales of 35,000 units per year. The company has invested $740,000 in this product and expects a return on investment of 19%. Required: a. Compute the markup on absorption cost. (Round your intermediate and final answer to 2 decimal places.) b. Compute the selling price of the product using the absorption costing approach. (Round your intermediate and final answer to 2 decimal places.)
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Ответ:
a. $2,156,000
b. $409,640
c. $2,565,640
Explanation:
First Calculate the Product Cost
Hint : Include Both Variable and Manufacturing Cost - Because Quamma Corporation uses absorption costing approach. Non manufacturing costs are not included in product cost.
Calculation of Total Product Cost
Direct materials ($ 18.50 × 35,000) $647,500
Direct labor ($ 16.10 × 35,000) $563,500
Variable manufacturing overhead ($ 3.40 × 35,000) $119,000
Fixed manufacturing overhead $826,000
Total Product Cost $2,156,000
Markup on absorption cost
Markup on absorption cost ($2,156,000 × 19%) = $409,640
Calculation of Selling Price
Total Product Cost $2,156,000
Add Markup on absorption cost $409,640
Selling Price $2,565,640
Ответ:
32 divided by 4 = 8
Step-by-step explanation:
because in each group there are 4 blocks and there are 8 groups of blocks