Quamma Corporation makes a product that has the following costs:Direct materialsDirect laborVariable manufacturing overheadFixed manufacturing overheadVariable selling and administrative expenses Fixed selling and administrativeexpenses Per Unit$ 16.20$ 13.80$ 1.10Per Year$ 553,800$ 2.80$ 551,000 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 26,000 units per year.The company has invested $510,000 in this product and expects a return on investment of 9%. Required:a. Compute the markup on absorption cost. Note: Round your intermediate and final answer to 2 decimal places.b. Compute the selling price of the product using the absorption costing approach. Note: Round your intermediate and final answer to 2 decimal places.
Quamma Corporation makes a product that has the following costs:Direct materialsDirect laborVariable manufacturing overheadFixed manufacturing overheadVariable selling and administrative expenses Fixed selling and administrativeexpenses Per Unit$ 16.20$ 13.80$ 1.10Per Year$ 553,800$ 2.80$ 551,000 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 26,000 units per year.The company has invested $510,000 in this product and expects a return on investment of 9%. Required:a. Compute the markup on absorption cost. Note: Round your intermediate and final answer to 2 decimal places.b. Compute the selling price of the product using the absorption costing approach. Note: Round your intermediate and final answer to 2 decimal places.
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter4: Accounting For Factory Overhead
Section: Chapter Questions
Problem 4P: Using the data in P4-2 and Microsoft Excel: 1. Separate the variable and fixed elements. 2....
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