Night Glow Inc. recently began production of a new product, the halogen light, which required the investment of $600,000 in assets. The costs of producing and selling 10,000 halogen lights are estimated as follows: Variable costs per unit:     Fixed costs:   Direct materials $32   Factory overhead $180,000 Direct labor 12   Selling and administrative expenses 80,000 Factory overhead 8       Selling and administrative expenses 7       Total variable cost per unit $59         Night Glow Inc. is currently considering establishing a selling price for the halogen light. The president of Night Glow Inc. has decided to use the cost-plus approach to product pricing and has indicated that the halogen light must earn a 10% return on invested assets. Required: Note: Round all markup percentages to two decimal places, if required. Round all costs per unit and selling prices per unit to the nearest whole dollar. 1.  Determine the amount of desired profit from the production and sale of the halogen light. $ 2.  Assuming that the product cost method is used, determine the following: a.  Product Cost amount per unit $   b.  Markup percentage   % c.  Selling price per unit $   3.  (Appendix) Assuming that the total cost method is used, determine the following: a.  Total Cost amount per unit $   b.  Markup percentage   % c.  Selling price per unit $   4.  (Appendix) Assuming that the variable cost method i

Product Pricing using the Cost-Plus Approach Methods; Differential Analysis for Accepting Additional Business Crystal Displays Inc. recently began production of a new product, flat panel displays, which required the investment of $1,500,000 in assets. The costs of producing and selling 5,000 units of flat panel displays are estimated as follows: Variable costs per unit:     Fixed costs:   Direct materials $120   Factory overhead $250,000 Direct labor 30   Selling and administrative expenses 150,000 Factory overhead 50       Selling and administrative expenses 35       Total variable cost per unit $235         Crystal Displays Inc. is currently considering establishing a selling price for flat panel displays. The president of Crystal Displays has decided to use the cost-plus approach to product pricing and has indicated that the displays must earn a 15% return on invested assets. Required:   Note: Round all markup percentages to two decimal places, if required. Round…

1. Make-or-Buy Decision Companion Computer Company has been purchasing carrying cases for its portable computers at a purchase price of $61 per unit. The company, which is currently operating below full capacity, charges factory overhead to production at the rate of 39% of direct labor cost. The fully absorbed unit costs to produce comparable carrying cases are expected to be as follows: Direct materials $29 Direct labor 20 Factory overhead (39% of direct labor) 7.8 Total cost per unit $56.8 If Companion Computer Company manufactures the carrying cases, fixed factory overhead costs will not increase and variable factory overhead costs associated with the cases are expected to be 15% of the direct labor costs. 2. Machine Replacement Decision A company is considering replacing an old piece of machinery, which cost $599,500 and has $349,400 of accumulated depreciation to date, with a new machine that has a purchase price of $483,600. The old machine could be sold for $63,000.…

Change in Sales Mix and Contribution Margin Head Pops Inc. manufactures two models of solar-powered, noise-canceling headphones: Sun Sound and Ear Bling models. The company is operating at less than full capacity. Market research indicates that 33,600 additional Sun Sound and 36,600 additional Ear Bling headphones could be sold. The income from operations by unit of product is as follows:   Sun SoundHeadphones Ear BlingHeadphones Sales price $34.10   $53.20   Variable cost of goods sold 19.10   29.80   Manufacturing margin $15.00   $23.40   Variable selling and administrative expenses 6.80   10.60   Contribution margin $8.20   $12.80   Fixed manufacturing costs 3.10   4.80   Income from operations $5.10   $8.00   Prepare an analysis indicating the increase or decrease in total profitability if 33,600 additional Sun Sound and 36,600 additional Ear Bling headphones are produced and sold, assuming that there is sufficient capacity for the additional production. Round…