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 profit from the production and sale of Product K. b. Determine the total manufacturing costs and the cost amount per unit for the production of 25,000 units of Product K. Total manufacturing costs Cost amount per unit c. Determine the markup percentage for Product K. Round your answer to one decimal place. % d. Determine the selling price of Product K. Round your answer to two decimal places.

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 profit from the production and sale of Product K. b. Determine the total manufacturing costs and the cost amount per unit for the production of 25,000 units of Product K. Total manufacturing costs Cost amount per unit c. Determine the markup percentage for Product K. Round your answer to one decimal place. % d. Determine the selling price of Product K. Round your answer to two decimal places.

Name: Hummingbird Company uses the product cost concept of applying the cos
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Description: 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$2.50Direct labor4.25Factory overhea

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter11: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 17E: Product cost method of product costing Smart Stream Inc. uses the product cost method of applying...

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