Magpie Corporation uses the total cost concept of product pricing. Below is the cost information for the production and sale of 60,000 units of its sole product. Magpie desires a profit equal to a 25% rate of return on invested assets of $700,000. Fixed factory overhead cost $38,700 Fixed selling and administrative costs 7,500 Variable direct materials cost per unit 4.60 Variable direct labor cost per unit 1.88 Variable factory overhead cost per unit 1.13 Variable selling and administrative cost per unit 4.50 The markup percentage on the total cost of the company's product is a.21.0% b.22.6% c.24.0% d.15.8%

Magpie Corporation uses the total cost method of product pricing. Below is cost information for the production and sale of 64,400 units of its sole product. Magpie desires a profit equal to a 19% return on invested assets of $619,000. Fixed factory overhead cost $36,000 Fixed selling and administrative costs 7,500 Variable direct materials cost per unit 4.72 Variable direct labor cost per unit 1.88 Variable factory overhead cost per unit 1.13 Variable selling and administrative cost per unit 4.50 The cost per unit for the production and sale of Magpie's product is

Ovation Company has a single product called a Bit. The company normally produces and sells 64,800 Bits each year at a selling price of $47 per unit. The company's unit costs at this level of activity are given below: Direct materials Direct labour Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Fixed selling expenses Total cost per unit $10.50 7.50 3.60 4.80 ($311,040 total) 6.60 2.70 ($174,960 total) $35.70 A number of questions relating to the production and sale of Bits follow. Each question is independent. Required. 1. Assume that Ovation Company has sufficient capacity to produce 97,200 Bits each year without any increase in fixed manufacturing overhead costs. The company could increase its sales by 25% above the current 64,800 units each year if it were willing to increase the fixed selling expenses by $105,000. a. Calculate the incremental net operating income. Incremental operating income $ 199,560 b. Would the increased fixed selling…

Kubin Company's relevant range of production is 15,000 to 19,000 units. When it produces and sells 17,000 units, its average costs per unit are as follows: Amount per Unit $ 7.60 $ 4.60 $ 2.10 $ 5.60 $ 4.10 $ 3.10 $ 1.60 $ 1.10 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense Required: 1. If 15,000 units are produced and sold, what is the variable cost per unit produced and sold? 2. If 19,000 units are produced and sold, what is the variable cost per unit produced and sold? 3. If 15,000 units are produced and sold, what is the total amount of variable cost related to the units produced and sold? 4. If 19,000 units are produced and sold, what is the total amount of variable cost related to the units produced and sold? 5. If 15,000 units are produced, what is the average fixed manufacturing cost per unit produced? 6. If 19,000 units are produced,…

Jamison Company uses the total cost method of applying the cost-plus approach to product pricing. Jamison produces and sells Product X at a total cost of $800 per unit, of which $540 is product cost and $260 is selling and administrative expenses. In addition, the total cost of $800 is made up of $460 variable cost and $340 fixed cost. The desired profit is $88 per unit. Determine the markup percentage on total cost. %

Ida Company produces a handcrafted musical instrument called a gamelan that is similar to a xylophone. The gamelans are sold for $840. Selected data for the company's operations last year follow: Units in beginning inventory Units produced Units sold Units in ending inventory Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs: Fixed manufacturing overhead Fixed selling and administrative The absorption costing income statement prepa Sales Cost of goods sold Gross margin Selling and administrative expense Net operating income 0 300 275 25 $ 100 $310 $ 30 $ 35 $ 66,000 $ 31,000 by the company's accountant for last year appears below: $ 231,000 181,500 49,500 40,625 $ 8,875 Required: 1. Under absorption costing, how much fixed manufacturing overhead cost is included in the company's inventory at the end of last year? 2. Prepare an income statement for last year using variable costing.

Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 32,000 Rets per year. Costs associated with this level of production and sales are given below: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expense Fixed selling expense Total cost Unit $ 15 6 3 5 160,000 4 128,000 192,000 6 $ 39 $ 1,248,000 Total $ 480,000 192,000 96,000 The Rets normally sell for $44 each. Fixed manufacturing overhead is $160,000 per year within the range of 25,000 through 32,000 Rets per year. Required: 1. Assume that due to a recession, Polaski Company expects to sell only 25,000 Rets through regular channels next year. A large retail chain has offered to purchase 7,000 Rets if Polaski is willing to accept a 16% discount off the regular price. There would be no sales commissions on this order; thus, variable selling expenses would be slashed by 75%. However, Polaski Company…

Required information [The following information applies to the questions displayed below.] Cane Company manufactures two products called Alpha and Beta that sell for $240 and $162, respectively. Each product uses only one type of raw material that costs $5 per pound. The company has the capacity to annually produce 131,000 units of each product. Its average cost per unit for each product at this level of activity is given below: Direct materials Direct labor Variable manufacturing overhead Traceable fixed manufacturing overhead Variable selling expenses Common fixed expenses Total cost per unit Alpha $ 35 48 27 35 32 35 $212 Beta $15 23 25 38 28 30 $ 159 The company's traceable fixed manufacturing overhead is avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars. 8. Assume Cane normally produces and sells 80,000 Betas and 100,000 Alphas per year. If Cane discontinues the Beta product line, its sales representatives could…