FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Wildhorse Doors, Inc. is in the process of setting a target selling price on its newly designed patio door. Cost data relating to the door
at a budgeted volume of 5,000 units is as follows:
Per
Total
Unit
Direct materials
$122
Direct labor
199
Variable manufacturing overhead
106
Fixed manufacturing overhead
$915,000
Variable selling and administrative expenses
41
Fixed selling and administrative expenses
457,500
Wildhorse uses cost-plus pricing that provides it with a 25% ROI on its patio door line. A total of $4,880,000 in assets is committed to
production of the new door.
(a1)
Compute each of the following under the absorption-cost approach: (Round answers to 0 decimal places, e.g. 5,275.)
Markup percentage needed to provide the desired ROI
%
Target selling price of the patio door
$
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Transcribed Image Text:Wildhorse Doors, Inc. is in the process of setting a target selling price on its newly designed patio door. Cost data relating to the door at a budgeted volume of 5,000 units is as follows: Per Total Unit Direct materials $122 Direct labor 199 Variable manufacturing overhead 106 Fixed manufacturing overhead $915,000 Variable selling and administrative expenses 41 Fixed selling and administrative expenses 457,500 Wildhorse uses cost-plus pricing that provides it with a 25% ROI on its patio door line. A total of $4,880,000 in assets is committed to production of the new door. (a1) Compute each of the following under the absorption-cost approach: (Round answers to 0 decimal places, e.g. 5,275.) Markup percentage needed to provide the desired ROI % Target selling price of the patio door $
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