1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Paraphin [41]
3 years ago
10

Rios Co. makes drones and uses the variable cost approach in setting product prices. Its costs for producing 30,000 units follow

. The company targets a profit of $310,000 on this product. Variable Costs per Unit Fixed Costs Direct materials Direct labor Overhead Selling $70Overhead 40 25 15 Selling Administrative $670,000 305,000 285,000 1. Compute the variable cost per unit 2. Compute the markup percentage on variable cost. 3. Compute the product's selling price using the variable cost method 1 Variable cost per unit 2 Markup percentage 3 Selling price
Business
2 answers:
Ann [662]3 years ago
4 0

Answer: The variable cost per unit is 150, The mark up percentage on variable cost is 5%, The selling price is $192

Explanation:

To calculate variable cost per unit

= (40 + 25 + 15 + 70)

= 150

To calculate fixed cost per unit

(670,000 + 305,000 + 285,000)

=1,260,000

Fixed cost per unit

= Total Fixed cost ÷ Total unit produced

= 1,260,000 ÷ 30,000

= 42

To compute the total variable cost

=Total Variable cost = Total quantity of output × variable cost per unit of output

= 30,000 × 150

= 4,500,000

Total Cost

= TFC + TVC

= 1,260, 000 + 4,500,000

= 5,760,000

To compute the mark up percentage on variable cost

= profit/ cost price ×100

= 310,000/ 5,760,000 × 100

= 0.05 × 100

= 5%

To compute the product selling price using the variable cost method

= variable cost per unit + Fixed cost per unit

= 150 + 42

= 192

Therefore the selling price is $192 in order to cover the fixed cost.

AnnyKZ [126]3 years ago
3 0

Answer:

1. Variable cost per unit   = $150

2. Markup percentage     = 34.89%

3. Selling price                 = $202.33

Explanation:

Variable cost per unit = 70+40+25+15= $150

Fixed cost   =  670,000+ 305,000 +285,000= $1,260,000

Fixed cost per unit  =    1,260,000/30,000= $42

Profit per unit   =        <u>Targeted profit</u>

                               Targeted production unit

                          = <u>$310,000 </u>   =$10.33

                                30,000

Markup percenge =     <u>Fixed cost per unit + profit per unit</u>

                                          Variable cost per unit

                                =<u>$42+ $10.33</u>    =    <u>52.33 </u>* <u>100</u>   = 34.89%

                                       $150                   $150      1

Selling Price        =  Variable cost per unit + markup

                            =  $150+$42+$10.33

                             = $202.33

Variable cost-plus pricing is calculated by  determining variable costs per unit and adding mark-up which will cover fixed costs per unit and generate a targeted profit margin.

You might be interested in
The industry-low, industry-average, and industry-high cost benchmarks on pp. 5-6 of the latest issue of the glo-bus statistical
Likurg_2 [28]
<span>the industry-low, industry-average, and industry-high cost benchmarks on pp. 5-6 of the latest issue of the glo-bus statistical review 

ANSWER: 
</span><span>are worth careful scrutiny by the managers of all companies because when a company's costs for one or more of the cost benchmarks are deemed "out-of-line," managers need to initiate corrective actions in the next decision round. </span>
5 0
3 years ago
Farm products which are perishable and seasonal nature are supplied by
Daniel [21]

Answer:

★  Farm products which are perishable and seasonal nature are supplied by many producers.

Explanation:

Hope you have a great day :)

8 0
2 years ago
Bear Publishing sells a nature guide. The following information was reported for a typical month: Total Per Unit Sales $ 17,600
avanturin [10]

Answer:

Instructions are below.

Explanation:

Giving the following information:

Sales= $17,600 ($16.00 selling price per unit)

Contribution margin 7,920

Fixed expenses 3,600

First, we need to calculate the unitary contribution margin:

Units sold= 17,600/16= 1,100 units

Unitary contribution margin= 7,920/1,100= $7.2

Now, using the following formulas, we can calculate the break-even point in units and dollars:

Break-even point in units= fixed costs/ contribution margin per unit

Break-even point in units= 3,600/7.2= 500 units

Break-even point (dollars)= fixed costs/ contribution margin ratio

Break-even point (dollars)= 3,600/ (7.2/16)

Break-even point (dollars)=$8,000

7 0
2 years ago
At the end of the fiscal year, the usual adjusting entry for depreciation on equipment was omitted. Which of the following state
Anton [14]

Answer:

c. Net income will be overstated for the current year.

Explanation:

Depreciation is defined as the reduction in the value of an asset over the period of it's useful life.

The deductions are calculated and taken out of the asset value on the balance sheet.

The adjusting entry for depreciation at the end of year is a debit to Depreciation Expense and a credit to Accumulated depreciation.

If this entry is no passed it means that Depreciation Expense is not recognised for that year.

Net income will be overstated because generally expenses will be understated.

5 0
2 years ago
American Food Services, Inc., acquired a packaging machine from Barton and Barton Corporation. Barton and Barton completed const
Simora [160]

Answer:

Following are the solution to this question:

Explanation:

Answer   \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \  Installment  \ Amount  \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ = \frac{4700000}{PVAF(11\%,4)} = 1,514,934

Answer \  1    \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \    Machinery A/c   \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \                     4,700,000\\\\

                     \text{To Lease Payable} A/C                    \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \                   4,700,000    \\\\ \text{(Being machine purchased on lease)}

Answer \ \ 2                   years \ \ \ \ \ \ \ \  Outstanding \ \ Amount  \ \ \ \ \ \ \ \ Installment \ \ \ \ \ \ \ \ Interest (11 \%)   \ \ \ \ \ \ \ Closing \ on \ Due \\\\    0   \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \  4,700,000  \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \  \ \ \ \ \ \ \ \ \  \ \ \ \  \ \ \ \ \ \ \ \ \ \ \ \          \ \ \ \ \ \ \ \ \     4,700,000   \\\\1    \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \     4,700,000    \ \ \ \ \ \ \ \ \ \ \ \    1514934      \ \ \ \ \ \ \ \ \ \ \ \ \ \     517000      \ \ \ \ \ \ \ \ \ \ \ \    3702066\\\\

2 \ \ \ \ \ \ \ \ \ \ \ \ \ \ 3,702,066 \ \ \ \ \ \ \ \ \ \ \ \ \ \ 1514934  \ \ \ \ \ \ \ \ \ \ \ \ \ \ 407227 \ \ \ \ \ \ \ \ \ \ \ \ \ \   2594359 \\\\3  \ \ \ \ \ \ \ \ \ \ \ \ \ \  2,589,359  \ \ \ \ \ \ \ \ \ \ \ \ \ \    1514934  \ \ \ \ \ \ \ \ \ \ \ \ \ \     285380   \ \ \ \ \ \ \ \ \ \ \ \ \ \   1364805\\\\4  \ \ \ \ \ \ \ \ \ \ \ \ \ \       1,364,805   \ \ \ \ \ \ \ \ \ \ \ \ \ \  1514934   \ \ \ \ \ \ \ \ \ \ \ \ \ \    150129  \ \ \ \ \ \ \ \ \ \ \ \ \ \    0    \\\\

Answer \ \ 3        \ \ \ \ \ \ \ \ \ \ \ \ \ \          Lease Payable \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \  997,934

                            expenses \ \  Interest \ \ \ \ \ \ \ \ \ \ \ \ \ \      517,000\\\\                       To\ \ cash \  A/c    \ \ \ \ \ \ \ \ \ \ \ \ \ \                                     1,514,934 \\\\                   \text{(First Installment Paid)}            

Answer \ 4  \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \                   Lease payable     \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \                     1,229,554

                              expenses \ \                       Interest         \ \ \ \ \ \ \ \ \ \ \ \ \ \  \ \ \   285,380\\\\                          To cash A/c    \ \ \ \ \ \ \ \ \ \ \ \ \ \  \ \ \                                      1,514,934\\\\                  \text{(Third Installment Paid)}

6 0
2 years ago
Other questions:
  • Carly interviews for the job—and she gets it! Her new boss says that what impressed him most was her global mindset, and he want
    6·1 answer
  • After hearing that a local tire company was looking for a new firm to handle their advertising, Kevin scheduled a sales presenta
    12·1 answer
  • Sam buys 100 shares of Acme stock at $100 per share on January 1, Year 1. At the end of the first year (December 31, Year 1), sh
    12·1 answer
  • What is the minimum completion cost of this project if there is a penalty of $1000 for each day the project lasts longer than 27
    10·1 answer
  • When a price floor becomes binding because of the change in the supply of hops, the net effect will be ?
    11·1 answer
  • What is universal default?
    5·1 answer
  • Arizona Desert Homes (ADH) constructed a new subdivision during 2020 and 2021 under contract with Cactus Development Co. Relevan
    14·1 answer
  • How is a loan obtained through a pawnshop typically paid off?
    9·1 answer
  • Explain three factors that had a negative impact on the financial performance of Unibic in its early years.
    10·1 answer
  • A new pizza restaurant is opening in town. The owners of this restaurant decide to place an advertisement in the town newspaper
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!