Managerial Accounting: Creating Value in a Dynamic Business Environment
12th Edition
ISBN: 9781260417074
Author: HILTON, Ronald
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 15, Problem 36E
The following data pertain to Royal Lighting Company’s oak-clad, contemporary chandelier.
Required: For each of the following cost bases, develop a cost-plus pricing formula that will result in a price of $400 for the oak chandelier.
- 1. Variable
manufacturing cost . - 2. Absorption manufacturing cost.
- 3. Total cost.
- 4. Total variable cost.
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The following data pertain to Royal Lighting Company's oak-clad, contemporary chandelier.
Variable manufacturing cost
Applied fixed manufacturing cost
Variable selling and administrative cost
Allocated fixed selling and administrative cost
Required:
For each of the following cost bases, develop a cost-plus pricing formula that will result in a price of $735 for the oak chandelier.
(Round your percentage answers to 2 decimal places (i.e., .1234 should be entered as 12.34).)
1. Variable manufacturing cost
2. Absorption manufacturing cost
3. Total cost
4. Total variable cost
$
$
$
$
735 =
735
735
735
Cost-Plus Pricing Formula
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+
$350
105
57
87
+
+
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%
%
% x
% x
The following costs are for Optical View Incorporated, a contact lens manufacturer:
Output in Units
Fixed Costs
Variable Costs
Total Costs
250
$ 4,750
$ 7,500
$ 12,250
300
4,750
9,000
13,750
350
4,750
10,500
15,250
400
4,750
12,000
16,750
For each level of output calculate the per-unit total cost, per-unit variable cost, and per-unit fixed cost. (Round your answers to the nearest whole dollar amount.)
Cost Relationships The following costs are for Optical View Inc., a contact lens manufacturer:
Required
Calculate and graph total costs, the total variable cost, and total fixed cost.
For each level of output calculate the per-unit total cost, per-unit variable cost, and per-unit fixed cost.
Using the results from requirement 2, graph the per-unit total cost, per-unit variable cost, and per-unit fixed cost, and discuss the behavior of the per-unit costs over the given output levels.
Chapter 15 Solutions
Managerial Accounting: Creating Value in a Dynamic Business Environment
Ch. 15 - Prob. 1RQCh. 15 - Prob. 2RQCh. 15 - List and briefly describe four major influences on...Ch. 15 - Prob. 4RQCh. 15 - Prob. 5RQCh. 15 - Prob. 6RQCh. 15 - Define the following terms: total revenue,...Ch. 15 - Prob. 8RQCh. 15 - Prob. 9RQCh. 15 - Prob. 10RQ
Ch. 15 - Prob. 11RQCh. 15 - List the four common cost bases used in cost-plus...Ch. 15 - List four reasons often cited for the widespread...Ch. 15 - What is the primary disadvantage of basing the...Ch. 15 - Prob. 15RQCh. 15 - Prob. 16RQCh. 15 - Prob. 17RQCh. 15 - Explain the phrase price-led costing.Ch. 15 - Prob. 19RQCh. 15 - Prob. 20RQCh. 15 - Could tear-down methods be used effectively for...Ch. 15 - Briefly describe the time-and-material pricing...Ch. 15 - Explain the importance of the excess-capacity...Ch. 15 - Prob. 24RQCh. 15 - Describe the following approaches to pricing new...Ch. 15 - Prob. 26RQCh. 15 - Briefly explain the potential negative...Ch. 15 - Prob. 28ECh. 15 - Prob. 29ECh. 15 - Prob. 30ECh. 15 - The marginal cost, marginal revenue, and demand...Ch. 15 - Prob. 32ECh. 15 - Refer to the cost and production data for the Wave...Ch. 15 - Prob. 35ECh. 15 - The following data pertain to Royal Lighting...Ch. 15 - Prob. 37ECh. 15 - Badger Valve and Fitting Company, located in...Ch. 15 - North American Pharmaceuticals, Inc. specializes...Ch. 15 - MPE, Inc. will soon enter a very competitive...Ch. 15 - Prob. 41PCh. 15 - Prob. 42PCh. 15 - Prob. 43PCh. 15 - Alexis Kunselman, president of Pharsalia...Ch. 15 - Southern Tier Heating, Inc. installs heating...Ch. 15 - Omaha Synthetic Fibers Inc. specializes in the...Ch. 15 - Prob. 47PCh. 15 - Prob. 48CCh. 15 - Zylar Industries is a manufacturer of standard and...
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