Question
In: Accounting
La Femme Accessories Inc. produces women's handbags. The cost of producing 1,180 handbags is as follows:...
La Femme Accessories Inc. produces women's handbags. The cost of producing 1,180 handbags is as follows:
| Direct materials | $15,500 |
| Direct labor | 8,400 |
| Factory overhead | 6,400 |
| Total manufacturing cost | $30,300 |
The selling and administrative expenses are $27,400. The management desires a profit equal to 18% of invested assets of $498,000.
If required, round your answers to nearest whole number.
a. Determine the amount of desired profit from
the production and sale of 1,180 handbags.
$
b. Determine the product cost per unit for the
production of 1,180 handbags.
$per unit
c. Determine the product cost markup percentage
for handbags.
%
d. Determine the selling price of handbags. Round your answers to nearest whole value.
| Cost | $per unit |
| Markup | $per unit |
| Selling price | $per unit |
Solutions
Expert Solution
Determine the amount of desired profit from the production and sale of 1,180 handbags.
| desired profit 498000*18% | $ 89,640.00 |
Determine the product cost per unit for the production of 1,180 handbags.
| Direct materials | $15,500 |
| Direct labor | 8,400 |
| Factory overhead | 6,400 |
| Total Cost | $30,300 |
| No of Units | 1180 |
|
$per unit 30300/1180 |
$ 26 |
c. Determine the product cost markup percentage for handbags.
| Total Cost | $ 30,300.00 |
| selling and administrative expenses | $ 27,400.00 |
| Total Cost | $ 57,700.00 |
| desired profit 498000*18% | $ 89,640.00 |
| Markup =89640/57700 |
155% |
d. Determine the selling price of handbags. Round your answers to nearest whole value.
| Cost (57700/1180) | $ 49 |
| Markup | 155% |
| Selling price | $ 125 |
ekkarill92 answered 5 months agoRelated Solutions
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