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 1 year ago
Next > < Previous

Related Solutions

La Femme Accessories Inc. produces women's handbags. The cost of producing 1,240 handbags is as follows:...
La Femme Accessories Inc. produces women's handbags. The cost of producing 1,240 handbags is as follows: Direct materials $14,300 Direct labor 8,500 Factory overhead 6,000 Total manufacturing cost $28,800 The selling and administrative expenses are $28,900. The management desires a profit equal to 14% of invested assets of $496,000. If required, round your answers to nearest whole number. a. Determine the amount of desired profit from the production and sale of 1,240 handbags. $ b. Determine the product cost per...
Nautical Accessories, Inc., manufactures women's boating hats. Manufacturing overhead is assigned to production on a machine-hour...
Nautical Accessories, Inc., manufactures women's boating hats. Manufacturing overhead is assigned to production on a machine-hour basis. For 2016, it was estimated that manufacturing overhead would total $357,180 and that 25,010 machine hours would be used. Required: a. Calculate the predetermined overhead application rate that will be used for absorption costing purposes during 2016. (Round your answer to 2 decimal places.) Predetermined overhead application rate b. During April, 3,300 hats were made. Raw materials costing $6,930 were used, and direct...
Jaybird Inc. produces leather handbags. The sales budget for the next four months is: July 5,600...
Jaybird Inc. produces leather handbags. The sales budget for the next four months is: July 5,600 units, August 7,800, September 8,300, October 8,100. Jaybird Inc.’s ending finished goods inventory policy is 10% of the following month’s sales. Each handbag requires 1.6 hours of unskilled labor (paid $15 per hour) and 2.2 hours of skilled labor (paid $22 per hour). What will be the total labor cost for the month of August? Multiple Choice $568,340 $29,830 $566,170 $488,050
Jaybird Inc. produces leather handbags. The sales budget for the next four months is: July 5,600...
Jaybird Inc. produces leather handbags. The sales budget for the next four months is: July 5,600 units, August 7,800, September 8,300, October 8,100. Jaybird Inc.’s ending finished goods inventory policy is 10% of the following month’s sales. Each handbag requires 1.6 hours of unskilled labor (paid $15 per hour) and 2.2 hours of skilled labor (paid $22 per hour). What will be the total labor cost for the month of August? $488,050 $568,340 $29,830 $566,170
1. Average Cost for Producing Microwaves Let the total cost function C(x) be defined as follows....
1. Average Cost for Producing Microwaves Let the total cost function C(x) be defined as follows. C(x) = 0.0003x3 − 0.02x2 + 103x + 3,600 Find the average cost function C. C(x) = Find the marginal average cost function C '. C '(x) = 2. Marginal Revenue for Producing Loudspeakers The management of Acrosonic plans to market the ElectroStat, an electrostatic speaker system. The marketing department has determined that the demand for these speakers is represented by the following function,...
PowerDrive, Inc. produces a hard disk drive that sells for $175 per unit. The cost of producing 25,000 drives in the prior year was:
PowerDrive, Inc. produces a hard disk drive that sells for $175 per unit. The cost of producing 25,000 drives in the prior year was:       Direct material $625,000 Direct labor 375,000 Variable overhead 125,000 Fixed overhead 1,500,000 Total cost $2,625,000   At the start of the current year, the company received an order for 3,200 drives from a computer company in China. Management of PowerDrive has mixed feelings about the order. On the one hand they welcome the...
Harley-Davidson Inc. produces motorcycles, motorcycle parts and related accessories and merchandise in the United States and...
Harley-Davidson Inc. produces motorcycles, motorcycle parts and related accessories and merchandise in the United States and internationally. It is headquartered in Milwaukee, Wisconsin. Use the following information on Harley-Davidson and five other similar companies to value Harley-Davidson as of December 31, 2004. Harley-Davidson Inc. 2004 ($ millions) Net income $    889.77 Number of common shares, millions        294.31 Earnings before interest and tax $ 1,506.16 Tax rate 35.0% Book value of equity $ 3,218.47 Book value interest-bearing debt $ 1,295.44...
Delta Company produces a single product. The cost of producing and selling a single unit of...
Delta Company produces a single product. The cost of producing and selling a single unit of this product at the company’s normal activity level of 103,200 units per year is: Direct materials $ 2.30 Direct labor $ 3.00 Variable manufacturing overhead $ 0.90 Fixed manufacturing overhead $ 4.45 Variable selling and administrative expenses $ 1.20 Fixed selling and administrative expenses $ 2.00 The normal selling price is $22.00 per unit. The company’s capacity is 139,200 units per year. An order...
Delta Company produces a single product. The cost of producing and selling a single unit of...
Delta Company produces a single product. The cost of producing and selling a single unit of this product at the company’s normal activity level of 104,400 units per year is: Direct materials $ 1.50 Direct labor $ 3.00 Variable manufacturing overhead $ 0.70 Fixed manufacturing overhead $ 4.15 Variable selling and administrative expenses $ 1.50 Fixed selling and administrative expenses $ 2.00 The normal selling price is $23.00 per unit. The company’s capacity is 136,800 units per year. An order...
Delta Company produces a single product. The cost of producing and selling a single unit of...
Delta Company produces a single product. The cost of producing and selling a single unit of this product at the company’s normal activity level of 86,400 units per year is: Direct materials $ 2.10 Direct labor $ 2.00 Variable manufacturing overhead $ .60 Fixed manufacturing overhead $ 4.15 Variable selling and administrative expense $ 1.50 Fixed selling and administrative expense $ 1.00 The normal selling price is $18 per unit. The company’s capacity is 109,200 units per year. An order...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT