Product Pricing using the Cost-Plus Approach Concepts; Differential Analysis for Accepting Additional Business Crystal Displays Inc. recently began production of a new product, flat panel displays, which required the investment of $2,160,000 in assets. The costs of producing and selling 10,800 units of flat panel displays are estimated as follows: Variable costs per unit: Direct materials Direct labor Factory overhead Selling and administrative expenses Total Required: $108 23 49 P Check My Work 42 $222 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 20% rate of return on invested assets. Fixed costs: Factory overhead Selling and administrative expenses Note: Round all markup percentages to two decimal places. 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 flat panel displays. 2. Assuming that the product cost concept is used, determine the following: a. The cost amount per unit. b. The markup percentage. c. the selling price of flat panel displays. a. Cost amount per unit b. Markup percentage c. Selling price per unit 3. Appendix Assuming that the total cost concept is used, determine the following: a. The cost amount per unit. b. The markup percentage. LO 72 X Σ' 0 $432,000 216,000 D U Coming December 9th 16h Love and Monsters-Watch the tra 00 Dec 8 2:25
Product Pricing using the Cost-Plus Approach Concepts; Differential Analysis for Accepting Additional Business Crystal Displays Inc. recently began production of a new product, flat panel displays, which required the investment of $2,160,000 in assets. The costs of producing and selling 10,800 units of flat panel displays are estimated as follows: Variable costs per unit: Direct materials Direct labor Factory overhead Selling and administrative expenses Total Required: $108 23 49 P Check My Work 42 $222 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 20% rate of return on invested assets. Fixed costs: Factory overhead Selling and administrative expenses Note: Round all markup percentages to two decimal places. 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 flat panel displays. 2. Assuming that the product cost concept is used, determine the following: a. The cost amount per unit. b. The markup percentage. c. the selling price of flat panel displays. a. Cost amount per unit b. Markup percentage c. Selling price per unit 3. Appendix Assuming that the total cost concept is used, determine the following: a. The cost amount per unit. b. The markup percentage. LO 72 X Σ' 0 $432,000 216,000 D U Coming December 9th 16h Love and Monsters-Watch the tra 00 Dec 8 2:25
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter11: Differential Analysis And Product Pricing
Section: Chapter Questions
Problem 6PA: Product pricing using the cost-plus approach methods; differential analysis for accepting additional...
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Product Pricing using the Cost-Plus Approach Concepts; Differential Analysis for Accepting Additional Business
Crystal Displays Inc. recently began production of a new product, flat panel displays, which required the investment of $2,160,000 in assets. The costs of producing and selling 10,800 units of flat panel displays are
estimated as follows:
Variable costs per unit:
Direct materials
Direct labor
Factory overhead
Selling and administrative expenses
Total
$108
23
49
42
$222
Fixed costs:
Factory overhead
Selling and administrative expenses
Check My Work
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 20% rate of return on invested assets.
Required:
Note: Round all markup percentages to two decimal places. 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 flat panel displays.
2. Assuming that the product cost concept is used, determine the following:
a. The cost amount per unit.
b. The markup percentage.
c. the selling price of flat panel displays.
a. Cost amount per unit
b. Markup percentage
c. Selling price per unit.
3. Appendix Assuming that the total cost concept is used, determine the following:
a. The cost amount per unit.
b. The markup percentage.
72 x
%
0
D
$432,000
216,000
(
•
Coming December 9th 16h
Love and Monsters - Watch the tra
0 0 Dec 8
2:25
![eBook
3. Appendix Assuming that the total cost concept is used, determine the following:
a. The cost amount per unit.
b. The markup percentage.
c. The selling price of flat panel displays.
a. Cost amount per unit
b. Markup percentage
c. Selling price per unit
4. Appendix Assuming that the variable cost concept is used, determine the following:
a. The cost amount per unit.
b. The markup percentage.
c. The selling price of flat panel displays..
a. Variable cost amount per unit
b. Markup percentage
c. Selling price per unit
5. The cost-plus approach price
conditions of the marketplace,
Feedback
Print Item
3.
Ś
Check My Work
158.40
%
%
Check My Work
1. Multiply the desired profit percentage by the desired amount (invested assets).
be viewed as a general guideline for establishing long-run normal prices. Other considerations, such as the price of competing products and general economic
lead management to establish a short-run price more or less than the cost-plus approach price.
2.
a. Divide the total manufacturing costs (direct labor, direct materials, and overhead) by the number of units produced.
b. Divide the desired profit plus the selling and administrative expenses by the total product costs.
c. Add cost (a) and markup [(a) x (b)].
O
G
•
2
Coming December 9th - 16h
Love and Monsters - Watch the tra....
Dec 8
2:25](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F79274d20-f2d5-4c8d-ae55-726dbf765493%2F231f7d4f-f961-46cb-9099-d94303f99423%2Fnj42nx_processed.jpeg&w=3840&q=75)
Transcribed Image Text:eBook
3. Appendix Assuming that the total cost concept is used, determine the following:
a. The cost amount per unit.
b. The markup percentage.
c. The selling price of flat panel displays.
a. Cost amount per unit
b. Markup percentage
c. Selling price per unit
4. Appendix Assuming that the variable cost concept is used, determine the following:
a. The cost amount per unit.
b. The markup percentage.
c. The selling price of flat panel displays..
a. Variable cost amount per unit
b. Markup percentage
c. Selling price per unit
5. The cost-plus approach price
conditions of the marketplace,
Feedback
Print Item
3.
Ś
Check My Work
158.40
%
%
Check My Work
1. Multiply the desired profit percentage by the desired amount (invested assets).
be viewed as a general guideline for establishing long-run normal prices. Other considerations, such as the price of competing products and general economic
lead management to establish a short-run price more or less than the cost-plus approach price.
2.
a. Divide the total manufacturing costs (direct labor, direct materials, and overhead) by the number of units produced.
b. Divide the desired profit plus the selling and administrative expenses by the total product costs.
c. Add cost (a) and markup [(a) x (b)].
O
G
•
2
Coming December 9th - 16h
Love and Monsters - Watch the tra....
Dec 8
2:25
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