Need help with this two part question. Thank you! Product Cost Method of Product CostingVoice Com, Inc. uses the product cost method of applying the cost-plus approach to product pricing. The costs of producing and selling 4,530 cell phones are as follows:Variable costs per unit:Direct materialsDirect laborFactory overheadSelling and administrative expensesTotal variable cost per unit$61392818$146Fixed costs:Factory overhead$201,200Selling and administrative expenses 68,200Voice Com desires a profit equal to a 14% return on invested assets of $600,700.a. Determine the amount of desired profit from the production and sale of 4,530 cell phones.84,098b. Determine the product cost per unit for the production of 4,530 cell phones. Round your answer to the nearest whole dollar.per unitc. Determine the product cost markup percentage for cell phones. Round your answer to two decimal places.%d. Determine the selling price of cell phones. Round your answers to the nearest whole dollar.Total CostMarkupSelling priceper unitper unitper unit Ridgeway Digital Components Company assembles circuit boards by using a manually operated machine to insert electronic components. The original cost of the machine is $52,700, the accumulated depreciation is$21,100, its remaining useful life is 5 years, and its residual value is negligible. On October 1 of the current year, a proposal was made to replace the present manufacturing procedure with a fully automatic machinethat has a purchase price of $109,600. The automatic machine has an estimated useful life of 5 years and no significant residual value. For use in evaluating the proposal, the managerial accountant accumulated thefollowing annual data on present and proposed operations:SalesDirect materialsDirect laborPower and maintenanceTaxes, insurance, etc.Selling and administrative expensesTotal expensesfana. Prepare a differential analysis dated October 1 to determine whether to continue with (Alternative 1) or replace (Alternative 2) the old machine. Prepare the analysis over the useful life of the new machine. If aamount is zero, enter "0". If required, use a minus sign to indicate a loss.Revenues:Line Item DescriptionSales (5 years)Costs:Differential AnalysisContinue with (Alt. 1) or Replace (Alt. 2) Old MachineOctober 1Purchase priceDirect materials (5 years)Direct labor (5 years)Power and maintenance (5 years)Taxes, insurance, etc. (5 years)Selling and admin. expenses (5 years)Profit (loss)Present ProposedOperations Operations$167,100 $167,100$56,900 $56,90039,5003,70019,5001,3004,40039,50039,500$140,900 $120,300-$Continue with Replace Old Machine Differential Effects(Alternative 2)Old Machine(Alternative 2)(Alternative 1)

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Product Cost Method of Product Costing Voice Com, Inc. uses the product cost method of applying the cost-plus approach to product pricing. The costs of producing and selling 4,530 cell phones are as follows: Variable costs per unit: Direct materials Direct labor Factory overhead Selling and administrative expenses Total variable cost per unit $61 39 28 18 $146 Fixed costs: Factory overhead Selling and administrative expenses Voice Com desires a profit equal to a 14% return on invested assets of $600,700. $201,200 68,200 a. Determine the amount of desired profit from the production and sale of 4,530 cell phones. 84,098 ✔ b. Determine the product cost per unit for the production of 4,530 cell phones. Round your answer to the nearest whole dollar. per unit c. Determine the product cost markup percentage for cell phones. Round your answer to two decimal places. d. Determine the selling price of cell phones. Round your answers to the nearest whole dollar.

Product Cost Method of Product Costing Voice Com, Inc. uses the product cost method of applying the cost-plus approach to product pricing. The costs of producing and selling 4,530 cell phones are as follows: Variable costs per unit: Direct materials Direct labor Factory overhead Selling and administrative expenses Total variable cost per unit $61 39 28 18 $146 Fixed costs: Factory overhead Selling and administrative expenses Voice Com desires a profit equal to a 14% return on invested assets of $600,700. $201,200 68,200 a. Determine the amount of desired profit from the production and sale of 4,530 cell phones. 84,098 ✔ b. Determine the product cost per unit for the production of 4,530 cell phones. Round your answer to the nearest whole dollar. per unit c. Determine the product cost markup percentage for cell phones. Round your answer to two decimal places. d. Determine the selling price of cell phones. Round your answers to the nearest whole dollar.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 31P: Jonfran Company manufactures three different models of paper shredders including the waste...

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Jonfran Company manufactures three different models of paper shredders including the waste container, which serves as the base. While the shredder heads are different for all three models, the waste container is the same. The number of waste containers that Jonfran will need during the following years is estimated as follows: The equipment used to manufacture the waste container must be replaced because it is broken and cannot be repaired. The new equipment would have a purchase price of 945,000 with terms of 2/10, n/30; the companys policy is to take all purchase discounts. The freight on the equipment would be 11,000, and installation costs would total 22,900. The equipment would be purchased in December 20x4 and placed into service on January 1, 20x5. It would have a five-year economic life and would be treated as three-year property under MACRS. This equipment is expected to have a salvage value of 12,000 at the end of its economic life in 20x9. The new equipment would be more efficient than the old equipment, resulting in a 25 percent reduction in both direct materials and variable overhead. The savings in direct materials would result in an additional one-time decrease in working capital requirements of 2,500, resulting from a reduction in direct material inventories. This working capital reduction would be recognized at the time of equipment acquisition. The old equipment is fully depreciated and is not included in the fixed overhead. The old equipment from the plant can be sold for a salvage amount of 1,500. Rather than replace the equipment, one of Jonfrans production managers has suggested that the waste containers be purchased. One supplier has quoted a price of 27 per container. This price is 8 less than Jonfrans current manufacturing cost, which is as follows: Jonfran uses a plantwide fixed overhead rate in its operations. If the waste containers are purchased outside, the salary and benefits of one supervisor, included in fixed overhead at 45,000, would be eliminated. There would be no other changes in the other cash and noncash items included in fixed overhead except depreciation on the new equipment. Jonfran is subject to a 40 percent tax rate. Management assumes that all cash flows occur at the end of the year and uses a 12 percent after-tax discount rate. Required: 1. Prepare a schedule of cash flows for the make alternative. Calculate the NPV of the make alternative. 2. Prepare a schedule of cash flows for the buy alternative. Calculate the NPV of the buy alternative. 3. Which should Jonfran domake or buy the containers? What qualitative factors should be considered? (CMA adapted)
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