Question

Assume that Sweeten Company used cost-plus pricing (and a markup percentage of 80% of total manufacturing cost) to establish selling prices for all of its jobs. What selling price would the company have established for Jobs P and Q? What are the selling prices for both jobs when stated on a per unit basis assuming 20 units were produced for Job P and 30 units were produced for Job Q? (

Answer 1

Answer:

Selling prices :

Job P: 94113/20=4706

Job Q: 5227/30=1741

Step-by-step explanation:

For this case we assume the following info given:

                                                Job P                Job Q

Total price for the job              $94113             $52227

Selling price per unit               $4706               $1741

And we can calculate the selling prices like this:

The total price for the job is defined as:

Total price for the job = Total manufacturing cost+ Markup (80%)

If we assume that x= Total manufacturing cost we have

Total price for the job = x +0.8 x =1.8x

For Job P

94113 = 1.8 x , x= 52285

For Job Q

52227= 1.8 x, x =29015

So then we can create the following table:

                                                         Job P              Job Q

_______________________________________________

Total manufacturing cost               52285              29015

Markup (80%)                     0.8*52285=41828    0.8*29015=23212

Total price for the job                    94113                  52227

Number of units in the job              20                       30

__________________________________________________

Selling price                            94113/20=4705.7     5227/30=1740.1

And after round the final answer would be:

Selling prices :

Job P: 94113/20=4706

Job Q: 5227/30=1741