Question

Mallard Corporation uses the product cost concept of product pricing. Below is the cost information for the production and sale of 45,000 units of its sole product. Mallard desires a profit equal to a 12% rate of return on invested assets of $800,000. Fixed factory overhead cost $82,000 Fixed selling and administrative costs 45,000 Variable direct materials cost per unit 5.50 Variable direct labor cost per unit 7.65 Variable factory overhead cost per unit 2.25 Variable selling and administrative cost per unit 0.90 The dollar amount of the desired profit from the production and sale of the company's product is

Answer 1

Answer:

$96,000

Explanation:

The computation of the dollar amount of the desired profit from the production and sale of the company's product is shown below:

= Invested assets × rate of return investment

= $800,000 × 12%

= $96,000

We simply multiply the invested assets by the rate of return investment so that the desired profit could be computed