Survey of Accounting (Accounting I)
8th Edition
ISBN: 9781305961883
Author: Carl Warren
Publisher: Cengage Learning
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Textbook Question
Chapter 12, Problem 12.16E
Product cost concept of product pricing
Based on the data presented in Exercise 12-15, assume that Willis Products Inc. uses the product cost concept of applying the cost-plus approach to product pricing.
a.Determine the total
b.Determine the product cost markup percentage per unit. Round to two decimal place.
c.Determine the selling price per unit. Round to the nearest dollar.
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1. Total Cost of Product A under ABC System2. Total Cost of Product B under ABC System3. Selling Price per unit of Product B assuming profit margin of 20% above cost
Accounting Question
Gerber Clothing Inc. has designed a rain suit for outdoor enthusiasts that is about to be introduced on the market. A standard cost
card has been prepared for the new suit, as follows:
Direct materials
Direct labour
Manufacturing overhead (1/6 variable)
Total standard cost per suit
Salaries
Advertising and other
Total
$ 98,455
437,000
$535,455
Standard
Quantity or
hours
a. The only variable selling and administrative costs will be $7 per suit for shipping. Fixed selling and administrative costs will be as
follows (per year):
2.6 metres
1.0 hours
1.0 hours
Markup percentage
Standard price
or Rate
$ 15 per metre
37 per hour
27 per hour
b. Since the company manufactures many products, it is felt that no more than 10,900 hours of labour time per year can be devoted to
production of the new suits.
c. An investment of $590,000 will be necessary to carry inventories and accounts receivable and to purchase some new equipment.
The company wants a 20% ROI in new product lines.
d. Manufacturing…
Chapter 12 Solutions
Survey of Accounting (Accounting I)
Ch. 12 - Mario Company is considering discontinuing a...Ch. 12 - Victor Company is considering disposing of...Ch. 12 - Prob. 3SEQCh. 12 - For which cost concept used in applying (he...Ch. 12 - Prob. 5SEQCh. 12 - Prob. 1CDQCh. 12 - Prob. 2CDQCh. 12 - A company could sell a building for $650,000 or...Ch. 12 - Prob. 4CDQCh. 12 - Prob. 5CDQ
Ch. 12 - A company fabricates a component at a cost of...Ch. 12 - Prob. 7CDQCh. 12 - Prob. 8CDQCh. 12 - Prob. 9CDQCh. 12 - Prob. 10CDQCh. 12 - Prob. 11CDQCh. 12 - Prob. 12CDQCh. 12 - Lease or sell decision Orwell Industries is...Ch. 12 - Prob. 12.2ECh. 12 - Prob. 12.3ECh. 12 - Prob. 12.4ECh. 12 - Prob. 12.5ECh. 12 - Make-or-buy decision Watts Technologies Company...Ch. 12 - Make-or-buy decision Wisconsin Arts of Milwaukee...Ch. 12 - Machine replacement decision Creekside Products...Ch. 12 - Differential analysis report for machine...Ch. 12 - Sell or process further St. Paul Lumber Company...Ch. 12 - Prob. 12.11ECh. 12 - Decision on accepting additional business Madison...Ch. 12 - Accepting business at a special price Palomar...Ch. 12 - Prob. 12.14ECh. 12 - Total cost concept of product costing Willis...Ch. 12 - Product cost concept of product pricing Based on...Ch. 12 - Variable cost concept of product pricing Based on...Ch. 12 - Target costing Toyota Motor Corporation (TM) uses...Ch. 12 - Differential analysis report involving opportunity...Ch. 12 - Prob. 12.1.2PCh. 12 - Prob. 12.1.3PCh. 12 - Differential analysis report for machine...Ch. 12 - Differential analysis report for machine...Ch. 12 - Differential analysis report for sales promotion...Ch. 12 - Differential analysis report for sales promotion...Ch. 12 - Differential analysis report for further...Ch. 12 - Prob. 12.4.2PCh. 12 - Product pricing using the cost-plus approach...Ch. 12 - Prob. 12.5.2PCh. 12 - Prob. 12.5.3PCh. 12 - Product pricing using the cost-plus approach...Ch. 12 - Prob. 12.5.5PCh. 12 - Product pricing using the cost-plus approach...Ch. 12 - Prob. 12.1MBACh. 12 - Prob. 12.2MBACh. 12 - Prob. 12.3.1MBACh. 12 - Contribution margin per constraint Using the data...Ch. 12 - Prob. 12.3.3MBACh. 12 - Contribution margin per constraint Using the data...Ch. 12 - Prob. 12.4.2MBACh. 12 - Contribution margin per constraint Using the data...Ch. 12 - Prob. 12.5.1MBACh. 12 - Prob. 12.5.2MBACh. 12 - Prob. 12.5.3MBACh. 12 - Product pricing Bev Frazier is a cost accountant...Ch. 12 - Prob. 12.2CCh. 12 - Prob. 12.3CCh. 12 - Cost-plus and target costing concepts The...Ch. 12 - Cost-plus and target costing concepts The...
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