Ladle Corporation uses the absorption costing approach to cost-pluspricing described in the text to set prices for its products. Based onbudgeted sales of 81,000 units next year, the unit product cost of aparticular product is $45.30. The company's selling and administrativeexpenses for this product are budgeted to be $1,898,000 in total for theyear. The company has invested $262,000 in this product and expects areturn on investment of 14%.The markup on absorption cost for this product would be:a. 14%b. 52.7%c. 51.7%d. 65.7%

The steps to determine the markup % are as follows:1. Calculate the total product cost:Unit product…

Answered: Ladle Corporation uses the absorption…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Cotton Company produces and sells socks. Variable costs are budgeted at $2 per pair, and fixed costs for the year are expected to total $140,000. The selling price is expected to be $4 per pair. The sales units required for Cotton Company to make an after-tax profit (πA) of $21,000, given an income tax rate of 50%, are: Group of answer choices 81,000 units. 90,000 units. 99,161 units. 93,500 units. 91,000 units.
ABC, Inc., uses the absorption costing approach to cost-plus pricing described in the text to set prices for its products. Based on budgeted sales of 45,000 unit next year,the unit product cost of a particular product is 15.60. The company's selling,general,and administrative expenses for this product are budgeted to be 1,035,000 in total for the year. The company has invested 280,000 in this product and expects a return on investment of 11%. The selling price for this product based on the absorption costing approach would be closest to: a. 39.28 b. 17.32 c. 97.20 d. 38.60
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Cullumber Corporation is in the process of setting a selling price for a recently designed product. The following data relate to this product at a budgeted volume of 60,000 units. Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses Fixed selling and administrative expenses (a1) Your answer is correct. Total unit variable cost $ Total unit fixed cost Total unit cost eTextbook and Media (a2) Cullumber uses cost-plus pricing to set its target selling price and has a markup on total unit cost of 30%. Per Unit $ Desired ROI per unit $ $30 Compute total unit variable cost, total unit fixed cost, and total unit cost for the new product. $ 40 10 6 86 Total 69 $2,220,000 155 1,920,000 Compute desired ROI per unit for the new product. (Round answer to 2 decimal places, e.g. 5.27.) Attempts: 1 of 5 used
Ocean Sails manufactures sailing boats in two models: the Wave Rider and the Stress Killer. The company currently uses a variable costing system for internal reporting purposes. Its budgeted profit statement for the year ended 31 March 2021 is provided in the following table: Wave Rider (£) Stress Killer (£) Total (£) Sales revenues 52,500,000 105,000,000 157,500,000 Variable cost of goods sold 39,343,750 79,800,000 119,143,750 Variable marketing & admin costs 6,300,000 12,600,000 18,900,000 Contribution margin 6,856,250 12,600,000 19,456,250 Fixed manufacturing overhead 3,500,000 Fixed marketing & admin costs 16,000,000 Profit (Loss) (43,750) The following information from the budget is also available: Wave Rider Stress Killer (Units) (Units) Opening inventory 5 8 Units produced 20 25 Closing inventory 15 5 Units…
Leo Corporation sells a product for $500 per unit. Its market share is 20 percent. The marketing manager believes that the market share can be increased to 30 percent with a reduction in price to $475. The product is currently earning a profit of $70 per unit. The president of Leo Corporation believes that the $70 profit per unit must be maintained. Calculate the target cost per unit
Salalah Inc. sells a plastic products to wholesalers. The company's budget for the upcoming year revealed anticipated unit sales of 38500, a selling price of OMR 47, variable cost per unit of OMR 11, and total fixed costs of OMR 390000.what is the safety margin in units for Bahwan Inc.?
XYZ Group, Inc. has two companies – X Ltd, which is operating at just above 50% capacity, and Y Ltd, which is operating at full capacity (7000 production hours). Y Ltd produces two products, A and B, using the same labor force for each product. For the next year its budgeted capacity involves a commitment to the sale of 3000 kg of B, the remainder of its capacity being used on A. Direct costs of these two products are: A($ per kg) B($ per kg)Direct Material 18 14Direct Wage 15 10Production Hour (1 hour) (2/3 hour) The company’s overhead is $126 000 per annum relating to A and B in proportion to their direct wages. At full capacity, $70 000 of this overhead is variable. Y Ltd prices its products with a 60% mark-up on its total costs. For the coming year, X Ltd wishes to buy from Y Ltd 2000 kg of product A which it proposes to process and sell, as product Z, for $100 per kg. The direct costs of processing are $15 per kg. X Ltd’s total fixed costs will not change, but variable overhead of…
In the current year, Becker Sofa Company expected to sell 12,000 leather sofas. Fixed costs for the year were expected to be $8,400,000; unit sales price was budgeted at $4,600; and unit variable costs were expected to be $2,200.Becker Sofa Company's margin of safety (MOS) in sales dollars is:
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Braile Gear Works sells a single gear for a price of $55.00 per unit. The variable costs of the gear are $23.00 per gear and annual fixed costs are $448,000. The cost analyst tells you that, based on the price and cost information of the gear and the marketing department's sales projection for next year, the margin of safety percentage is 30 percent. How many units does marketing expect to sell next year? Note: Do not round intermediate calculations.

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