Managerial Accounting: Tools for Business Decision Making
7th Edition
ISBN: 9781118334331
Author: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
Publisher: WILEY
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Textbook Question
Chapter 8, Problem 8.5E
Schopp Corporation makes a mechanical stuffed alligator that sings the Martian national anthem. The following information is available for Schopp Corporation’s anticipated annual volume of 500,000 units.
| Per Unit | Total | |
| Direct materials | $ 7 | |
| Direct labor | $11 | |
| Variable manufacturing |
$15 | |
| Fixed manufacturing overhead | $3,000,000 | |
| Variable selling and administrative expenses | $14 | |
| Fixed selling and administrative expenses | $1,500,000 |
The company has a desired
Instructions
(a) Compute the total cost per unit.
(b) Compute the desired ROI per unit.
(c) Compute the markup percentage using total cost per unit.
(d) Compute the target selling price.
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Schopp Corporation makes a mechanical stuffed alligator that sings the Martian national anthem. The following information is
available for Schopp Corporation's anticipated annual volume of 536,000 units.
Direct materials
Direct labor
Variable manufacturing overhead
Fixed manufacturing overhead
Variable selling and administrative expenses
Fixed selling and administrative expenses
Compute the total cost per unit.
Per Unit
Total cost per unit $
$7
$9
$13
$13
Total
$3,752,000
The company has a desired ROI of 25%. It has invested assets of $27,872,000.
$1,608,000
Schopp Corporation makes a mechanical stuffed alligator that sings the Martian national anthem. The following information is
available for Schopp Corporation's anticipated annual volume of 501,000 units.
Per Unit
$8
$13
$16
Direct materials
Direct labor
Variable manufacturing overhead
Fixed manufacturing overhead
Variable selling and administrative expenses $13
Fixed selling and administrative expenses
Total
$3,507,000
Absorption-cost pricing markup percentage
$1,503,000
The company has a desired ROI of 25%, It has invested assets of $30,060,000,
Using absorption-cost pricing, compute the markup percentage. (Round answer to 2 decimal places, e.g. 10.50%.)
%
Schopp Corporation makes a mechanical stuffed alligator that sings the Martian national anthem. The following information is available for Schopp Corporation's anticipated annual volume of 536,000 units.
Direct materials
Direct labor
Variable manufacturing overhead
Fixed manufacturing overhead
Variable selling and administrative expenses $13
Fixed selling and administrative expenses
Compute the total cost per unit.
Total cost per unit
$
eTextbook and Media
The company has a desired ROI of 25%. It has invested assets of $27,872,000.
Compute the desired ROI per unit
Per Unit
Desired ROI per unit
$6
$10
$14
S
Total
$3,752,000
$1,072,000
Chapter 8 Solutions
Managerial Accounting: Tools for Business Decision Making
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Ch. 8 - What is a transfer price? Why is determining a...Ch. 8 - When setting a transfer price, what objective(s)...Ch. 8 - What are the three approaches for determining...Ch. 8 - Prob. 14QCh. 8 - What is the general formula for determining the...Ch. 8 - When determining the minimum transfer price, what...Ch. 8 - In what circumstances will a negotiated transfer...Ch. 8 - What costs are excluded from the cost base when...Ch. 8 - Prob. 19QCh. 8 - Prob. 20QCh. 8 - Onega Company manufactures computer hard drives....Ch. 8 - Mussatto Corporation produces snowboards. The...Ch. 8 - Jaymes Corporation produces high-performance...Ch. 8 - Momies Corporation produces microwave ovens. The...Ch. 8 - During the current year, Chudrick Corporation...Ch. 8 - Rooney Small Engine Repair charges 42 per hour of...Ch. 8 - Prob. 8.7BECh. 8 - Use the data from BE8-7 but assume that the...Ch. 8 - Use the data from BE8-7 but assume that the units...Ch. 8 - Using the data in BE8-4, compute the markup...Ch. 8 - Using the data in BH8-4, compute the markup...Ch. 8 - Maize Water is considering introducing a water...Ch. 8 - Gundy Corporation produces area rugs. The...Ch. 8 - Presented below are data relating to labor for...Ch. 8 - The fastener division of Southern Fasteners...Ch. 8 - Mesa Cheese Company has developed a new cheese...Ch. 8 - Eckert Company is involved in producing and...Ch. 8 - Leno Company makes swimsuits and sells these suits...Ch. 8 - Kaspar Corporation makes a commercial-grade...Ch. 8 - Schopp Corporation makes a mechanical stuffed...Ch. 8 - Almas Recording Studio rents studio time to...Ch. 8 - Gibbs Corporation produces industrial robots for...Ch. 8 - Second Chance Welding rebuilds spot welders for...Ch. 8 - Rey Custom Electronics (RCE) sells and installs...Ch. 8 - Wassons Classic Cars restores classic automobiles...Ch. 8 - Chen Companys Small Motor Division manufactures a...Ch. 8 - The Cycle Division of Ayala Company has the...Ch. 8 - Prob. 8.13ECh. 8 - The Bathtub Division of Kirk Plumbing Corporation...Ch. 8 - The Appraisal Department of Jean Bank performs...Ch. 8 - Crede Inc. has two divisions. Division A makes and...Ch. 8 - Prob. 8.17ECh. 8 - Prob. 8.18ECh. 8 - Rap Corporation produces outdoor portable...Ch. 8 - Information for Gibbs Corporation is given in...Ch. 8 - National Corporation needs to set a target price...Ch. 8 - Prob. 8.2APCh. 8 - Suttons Electronic Repair Shop has budgeted the...Ch. 8 - Word Wizard is a publishing company with a number...Ch. 8 - Prob. 8.5APCh. 8 - Comm Devices (CD) is a division of Worldwide...Ch. 8 - Prob. 8.7APCh. 8 - Anderson Windows Inc. is in the process of setting...Ch. 8 - CURRENT DESIGNS As a service to its customers,...Ch. 8 - Prob. 8.1BYPCh. 8 - Construction on the Bonita Full-Service Car Wash...Ch. 8 - Real-World Focus Merck Co., Inc. is a global,...Ch. 8 - Prob. 8.5BYPCh. 8 - Prob. 8.6BYPCh. 8 - The January 2011 issue of Strategic Finance...
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