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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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…
Sunland Limited reported the following items in shareholders' equity on December 31, 2024: Share capital: Preferred shares, $5 cumulative dividend, 145,000 shares issued and outstanding. $14,500,000 Share capital: Common shares, 711,000 issued and outstanding. $28,440,000 Retained earnings. $26,830,000
XYZ Group, Inc. has two companies – X Ltd, which is operating at just above 50% capacity, and Y Ltd, which is operating at full capacity (7000 production hours). Y Ltd produces two products, A and B, using the same labor force for each product. For the next year its budgeted capacity involves a commitment to the sale of 3000 kg of B, the remainder of its capacity being used on A. Direct costs of these two products are: A($ 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…
ErgoNow sells its main product, ergonomic mouse pads, for $12 each. Its variable cost is $5.40 per pad. Fixed costs are $200,000 per month for volumes up to 65,000 pads. Above 65,000 pads, monthly fixed costs are $260,000. Prepare a monthly flexible budget for the product, showing sales revenue, variable costs, fixed costs, and operating income for volume levels of 35,000, 45,000, and 75,000 pads. ErgoNow Flexible Budget Budget Amounts Per Unit Units 35,000 45,000 75,000 (1) (2) (3) (4) (5) (1) Contribution Margin Fixed Costs Operating Income Sales Revenue Variable Costs (2) Contribution Margin Fixed Costs Operating Income Sales Revenue Variable Costs (3)…
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In the current year, Becker Sofa Company expected to sell 12,900 leather sofas. Fixed costs for the year were expected to be $8,404,500; unit sales price was budgeted at $5,050; and unit variable costs were expected to be $2,650.Becker Sofa Company's margin of safety (MOS) in units is: Multiple Choice 9,698. 8,898. 10,798. 9,998. 9,398.
Cleaning Care Inc. expects to sell 9,000 mops. Fixed costs (for the year) are expected to be $13,000, unit sales price is expected to be $11, and unit variable costs are budgeted at $7. Cleaning Care's margin of safety (MOS) in units is:
During the current year, OutlyTech Corp. expected to sell 22,500 telephone switches. Fixed costs for the year were expected to be $12,142,500, the unit sales price was budgeted at $3,250, and unit variable costs were budgeted at $1,400. OutlyTech's margin of safety (MOS) in units is (rounded up to nearest whole number): Multiple Choice 17,106. 15,936. 19,716. 15,806. 21,026.
Required information Eckert Company uses the absorption costing approach to cost plus pricing to set prices for its products. Based on budgeted sales of 18.000 units next year, the unit product cost of a particular product is $60.40. The company's selling general, and administrative expenses for this product are budgeted to be $370.800 in total for the year. The company has invested $260.000 in this product and expects a return on investment of T (Appendix 12A) The markup on absorption cost for this product would be closest to which of the following O O O M4T 36.74 ALIK HON 3 Save & Submit
Seabold Interiors sold 18,400 yards of wallpaper last year at a contributionmargin of $3.50 per yard and incurred $49,400 in total fixed costs. This year, contribution margin per yard is expected to increase to $4, and fixed costs are expected to increase to $58,000. How many units must be sold this year to earn the same operating income as was earned last year? (Hint: Use the expanded contribution margin model described in this chapter.)a. 16,900.b. 17,500.c. 18,250.d. 20,200.e. None of the above.

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