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Nikolay [14]
2 years ago
10

Pedrotti Corporation would like to use target costing for a new product it is considering introducing. At a selling price of $40

per unit, management projects sales of 30,000 units. The new product would require an investment of $300,000. The desired return on investment is 16%. The target cost per unit is closest to: (Do not round intermediate calculations.)
Business
1 answer:
LiRa [457]2 years ago
6 0

Answer:

$38.40

Explanation:

Target Cost = Selling Price per Unit - Profit Margin per Unit

Here, Selling Price per Unit = $40

Profit Margin = 16% of the Investment in Product

Investment = $ 300,000

Profit Margin = 16% × 300,000

                      = $48,000

Number of Units Sales = 30,000 Units

Profit Margin per Unit:

= Profit Margin ÷ Number of Units Sales

= $48,000 ÷ 30,000

= $1.6

Therefore,

Target Cost per Unit:

= Selling Price per Unit - Profit Margin per Unit    

= $40.00 - $ 1.60

= $38.40

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Predetermined Overhead Rate, Application of Overhead to Jobs, Job Cost, Unit Cost On August 1, Cairle Company's work-in-process
Whitepunk [10]

Answer:

Cairle Company

1. The predetermined overhead rate based on direct labor cost is:

= 75% of direct labor cost.

2. August 31 Ending Balances:

Job 70 $7,475  

Job 71 $7,960

Job 72 $9,825

Job 73 $8,150  

Job 74 $1,350

Job 75 $2,065

Job 76 $384

3. Ending balance of Work in Process, August 31:

= $9,694

4. The cost of goods sold for August = $11,890

5. Sales revenue for August = $14,268

Explanation:

a) Data and Calculations:

Work in process inventory on August 1:

                               Job 70  Job 71  Job 72  Job 73  Job 74  Job 75  Job 76

Direct materials     $1,600  $2,000     $850

Direct labor              1,900     1,300       900

Applied overhead    1,425       975       675

Direct materials       $800   $1,235 $3,550 $5,000   $300     $560     $80

Direct labor              1,000     1,400   2,200     1,800     600       860      172

Applied overhead      750     1,050    1,650     1,350     450       645      129

Total costs            $7,475  $7,960 $9,825   $8,150 $1,350 $2,065   $384

Work in Process:

Job 71 $7,960

Job 74   1,350

Job 76     384

Total  $9,694

Cost of goods sold:

Job 72 $9,825

Job 75 $2,065

Total    $11,890

Sales revenue = $14,268 ($11,890 * 1.20)

4 0
2 years ago
The centralized computer technology department of Hardy Company has expenses of $320,000. The department has provided a total of
Irina-Kira [14]

Answer:

Retail Division  $480,000

Commercial Division  $30,000

Explanation:

To measure divisional income consider only those items attributable to a particular division.

Retail Division

Sales                                                                             2,150,000

<em>Less</em> Cost of Sales                                                       (1,300,000)

Controllable Contribution                                              850,000

<em>Less</em> Controllable Fixed Cost :

Selling expenses                                                          (150,000)

Allocated Central Cost (2,750/4,000×$320,000)     (220,000)

Divisional Profit Contribution                                       480,000

Commercial Division

Sales                                                                              1,200,000

<em>Less</em> Cost of Sales                                                        (800,000)

Controllable Contribution                                              400,000

<em>Less</em> Controllable Fixed Cost :

Selling expenses                                                          (150,000)

Allocated Central Cost (1,250/4,000×$320,000)      (220,000)

Divisional Profit Contribution                                         30,000

8 0
3 years ago
A country is said to have a _______ exchange rate when the government keeps the exchange rate against other currencies at or nea
77julia77 [94]

Answer:

Fixed

Explanation:

The government keeps the exchange rate FIXED the the same rate.

3 0
3 years ago
OPEC announces it will increase oil production by 20 percent. What is the effect of this action on the price of oil now? will ,
valina [46]

Answer:

An increase in the production leads to decline in the price. Producers are likely to supply more at the lower price or the existing price, considering the increase in production. If there is a 20 percent increase in the production, then it tends to increase the supply. An increase in supply will have a negative impact on price.

The effect of the increase in production on price is shown in the above figure. A twenty percent increase in the production causes an increase in the supply. Excessive supply causes a reduction in the price. Hence, when the supply increases from P1 to Q2, the price decreases to P2 from P1.

7 0
3 years ago
Shannon Corporation manufactures custom cabinets for kitchens. It uses a normal costing system with two direct cost categories:
adelina 88 [10]

Answer:

please find the answers below

Explanation:

Shannon corporation:

The inventory cycle of is composed of 3 phases:

1. Ordering / purchases

2. Production

3. Finished good / sales

The ordering phase is when the company orders goods and the time it takes to receive the raw materials.

The production phase is the work in process phase when the raw materials are converted into finished goods.

The finished goods/ sales phase is the time it takes to sell the goods that were manufactured.

Journal entries in a manufacturing company are used to record transactions. Adjusting journal entries are used to recognize costs and revenues in the correct period.  

Dr Work – In - process                            $75, 000

Cr Inventory- Direct materials                                   $$75, 000

Recording actual direct materials used

Dr Wages Payroll                           $55, 500

Cr Cash /Bank                                            $55, 500

Recording direct labor wages incurred

Dr Manufacturing overhead          $3, 500

Cr Inventory- Indirect materials                  $3, 500

Recording the cost of indirect materials incurred

Dr Manufacturing overhead         $49, 000

Cr Cash/ Bank                                    $49, 000

Recording wages payable to supervisor and engineer

Dr Manufacturing overhead         $13, 000

Cr Cash/ Bank                                                 $13, 000

Plant utilities and repairs taken to manufacturing overhead

Dr Manufacturing overhead                $11, 000

Cr Accumulated depreciation – plant                 $11, 000

Record depreciation on factory plant

Dr Finished goods                                $190, 000

Cr Work – In – Process                                            $190, 000

Record of jobs completed (cost of goods manufactured)

Dr Work – in – process                       $76, 500

Cr Manufacturing overhead                                   $76, 500

Record overhead applied to production

[$3, 500 + $49, 000 + $13, 000 + $11, 000 = $76, 500]

Dr Cost of goods sold                         $145, 000

Cr finished goods                                                        $145, 000

Record cost of jobs or goods completed and sold

8 0
3 years ago
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