Question
In: Accounting
Willis Products Inc. uses the product cost concept of applying the cost-plus approach to product pricing....
Willis Products Inc. uses the product cost concept of applying the cost-plus approach to product pricing. The costs of producing and selling 2,000 units of medical tablets are as follows:
| Variable costs per unit: | Fixed costs: | ||||||
| Direct materials | $83 | Factory overhead | $58,000 | ||||
| Direct labor | 30 | Selling and admin. exp. | 20,000 | ||||
| Factory overhead | 26 | ||||||
| Selling and admin. exp. | 21 | ||||||
| Total | $160 | ||||||
Willis Products desires a profit equal to a 25% rate of return on invested assets of $116,560.
a. Determine the total manufacturing costs for the production and sale of 2,000 units.
| Total Manufacturing Costs | |
| Variable | $ |
| Fixed factory overhead | |
| Total | $ |
Determine the cost amount per unit for the production and sale
of 2,000 units.
$ per unit
b. Determine the product cost markup percentage
per unit. Round your percentage answer to one decimal place.
%
c. Determine the selling price per unit. Use
the rounded product cost markup percentage in your calculations,
and round the amount of the markup to the nearest whole
dollar.
$ per unit
Solutions
Expert Solution
a. Determine the total manufacturing costs for the production and sale of 2,000 units.
| Total Manufacturing Costs | |
| Variable [($83 +$30 +$26) × 2,000 units] | $278,000 |
| Fixed factory overhead | $58,000 |
| Total | $336,000 |
Cost per unit for production and sale:
= Total Manufacturing Cost 
No. of units produced
= $336,000
2,000 units
= $168
____________________________________________________________
b. Determine the product cost markup percentage per unit.
Markup Percentage = [Selling Expense + Desired Profit]
Total Manufacturing Cost
= ([$21 
2,000 units) + $20,000] + [Invested Assets
ROI]
Total Manufacturing Cost
= $62,000 + [$116,560
25%]
$336,000
= [$62,000 + $29,140]
$336,000
= 27.125%
_____________________________________________________________
c. Determine the selling price per unit.
Selling price = Product Cost + markup
= $168 + [$168
27.125%]
= $168 + $45.57
= $213.57
ekkarill92 answered 3 years agoRelated Solutions
Willis Products Inc. uses the total cost concept of applying the cost-plus approach to product pricing....
Willis Products Inc. uses the total cost concept of applying the
cost-plus approach to product pricing. The costs of producing and
selling 4,000 units of medical tablets are as follows:
Variable costs per unit:
Fixed costs:
Direct materials
$99
Factory overhead
$136,000
Direct labor
36
Selling and admin. exp.
44,000
Factory overhead
30
Selling and admin. exp.
25
Total
$190
Willis Products desires a profit equal to a 20% rate of return
on invested assets of $319,600.
a. Determine the...
RooPhone Inc. uses the product cost concept of applying the cost-plus approach to product pricing. The...
RooPhone Inc. uses the product cost concept of
applying the cost-plus approach to product pricing. The costs of
producing and selling 5,000 units of cellular phones are as
follows: (7 points)
Variable
costs Fixed
Costs:
Direct materials
$625,000 Factory
overhead $215,000
Direct
labor 225,000 Selling
& Admin.
expenses
75,000
Factory
Overhead
200,000
Selling & admin. Exp. 150,000
$1,200,000
RooPhone desires a profit equal to a 18% rate of return on
invested assets of $550,000.
Required:
a.) Determine the amount of desired profit.
b.) Determine...
RooPhone Inc. uses the product cost concept of applying the cost-plus approach to product pricing. The...
RooPhone Inc. uses the product cost concept of applying the
cost-plus approach to product pricing. The costs of producing and
selling 5,000 units of cellular phones are as follows: (7 points)
Variable costs Fixed Costs: Direct materials $625,000 Factory
overhead $215,000 Direct labor 225,000 Selling & Admin.
expenses 75,000 Factory Overhead 200,000 Selling & admin. Exp.
150,000 $1,200,000 RooPhone desires a profit equal to a 18% rate of
return on invested assets of $550,000. Required: a.) Determine the
amount of...
Bluebird Inc. uses the product cost concept of applying the cost-plus approach to product pricing. The...
Bluebird Inc. uses the product cost concept of applying the
cost-plus approach to product pricing. The costs and expenses of
producing 25,000 units of Product K are as follows:
Variable costs: $2.50
Direct Materials 4.25
Direct Labor 1.25
Factory Overhead 0.50
Total: 8.50
Fixed Costs $25,000
Selling and Administrative expenses 17,000
Bluebird desires a profit equal to a 5% rate of return on
invested assets of $642,500
a) determine the amount of desired profit from the production
and sale of...
Hummingbird Company uses the product cost concept of applying the cost-plus approach to product pricing. The...
Hummingbird Company uses the product cost concept of applying
the cost-plus approach to product pricing. The costs and expenses
of producing 25,000 units of Product K are as follows:
Variable costs:
Direct materials
$2.50
Direct labor
4.25
Factory overhead
1.25
Selling and administrative expenses
0.50
Total
8.50
Fixed costs:
Factory overhead
$25,000
Selling and administrative expenses
17,000
Hummingbird desires a profit equal to a 5% rate of return on
invested assets of $642,500.
a. Determine the amount of desired...
Tidewater Company uses the product cost concept of applying the cost-plus approach to product pricing. The...
Tidewater Company uses the product cost concept of applying the
cost-plus approach to product pricing. The cost and expenses of
producing and selling 50,000 units of Product K are as follows:
Variable costs:
Direct materials
$5.00
Direct labor
8.50
Factory overhead
2.50
Selling and administrative expenses
1.00
Total
$17.00
Fixed costs:
Factory overhead
$50,000
Selling and administrative expenses
34,000
Tidewater desires a profit equal to a 10% rate of return on
invested assets of $1,285,000.
a. Determine the amount of...
Total Cost Concept of Product Costing Willis Products Inc. uses the total cost concept of applying...
Total Cost Concept of Product Costing
Willis Products Inc. uses the total cost concept of applying the
cost-plus approach to product pricing. The costs of producing and
selling 5,000 units of medical tablets are as follows:
Variable costs per unit:
Fixed costs:
Direct materials
$120
Factory overhead
$205,000
Direct labor
44
Selling and admin. exp.
70,000
Factory overhead
37
Selling and admin. exp.
29
Total
$230
Willis Products desires a profit equal to a 20% rate of return
on invested...
MyPhone, Inc. uses the product cost method of applying the cost-plus approach to product pricing. The...
MyPhone, Inc. uses the product cost method of applying the
cost-plus approach to product pricing. The costs of producing and
selling 5,380 cell phones are as follows:
Variable costs per unit:
Fixed costs:
Direct materials
$64
Factory overhead
$198,000
Direct labor
31
Selling and administrative expenses
71,300
Factory overhead
23
Selling and administrative expenses
21
Total variable cost per unit
$139
MyPhone desires a profit equal to a 16% rate of return on
invested assets of $600,700.
a. Determine the...
MyPhone, Inc. uses the product cost method of applying the cost-plus approach to product pricing. The...
MyPhone, Inc. uses the product cost method of applying the
cost-plus approach to product pricing. The costs of producing and
selling 5,380 cell phones are as follows:
Variable costs per unit:
Fixed costs:
Direct materials
$64
Factory overhead
$198,000
Direct labor
31
Selling and administrative expenses
71,300
Factory overhead
23
Selling and administrative expenses
21
Total variable cost per unit
$139
MyPhone desires a profit equal to a 16% rate of return on
invested assets of $600,700.
a. Determine the...
Voice Com, Inc., uses the product cost method of applying the cost-plus approach to product pricing....
Voice Com, Inc., uses the product cost method of applying the
cost-plus approach to product pricing. The costs of producing and
selling 5,010 units of cell phones are as follows:
Variable costs:
Fixed costs:
Direct materials
$62
per unit
Factory overhead
$200,200
Direct labor
38
Selling and admin. exp.
69,900
Factory overhead
26
Selling and admin. exp.
20
Total variable cost per unit
$146
per unit
Voice Com desires a profit equal to a 16% rate of return on
invested...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Will iron(III) hydroxide precipitate from a pH = 1.00 solution with [Fe3+] = 1.0 x 10-5?...
- What do you believe happens during the final scene of the story between the brothers at....
- A 5.171 g sample of a solid, weak, monoprotic acid is used to make a 100.0...
- 1. Creep is one of deformation that occurred in concrete structure. Give one example that can...
- Why does a particular codon represent only one specific amino acid?
- Write a function template sort that takes two references to generic objects and switches them if...
- What 2 things happen to the melting point of a solid when an impurity is present?
ADVERTISEMENT