Question

39) Sunland Company provides financial consulting and has collected the following data for the next year’s budgeted activity for a lead consultant.

Consultants’ wages	$90000
Fringe benefits	$22500
Related overhead	$17500
Supply clerk’s wages	$19000
Fringe benefits	$4000
Related overhead	$22000
Profit margin per hour	$20
Profit margin on materials	15%
Total estimated consulting hours	5000
Total estimated material costs	$180000

A consulting job takes 20 hours of consulting time and $180 of materials. The client’s bill would be

$1100.

$1172.

$952.

$772.

35) Sunland Company has gathered the following information concerning one model of shoe:

Variable manufacturing costs	$45000
Variable selling and administrative costs	$20000
Fixed manufacturing costs	$160000
Fixed selling and administrative costs	$120000
Investment	$1700000
ROI	30%
Planned production and sales	5000 pairs

What is the desired ROI per pair of shoes?

$69

$102

$168

$171

36)

Bonita Industries has a new product going on the market next year. The following data are projections for production and sales:

Variable costs	$312500
Fixed costs	$450000
ROI	14%
Investment	$3000000
Units produced and sold	250000 units

What is the target selling price per unit?

$3.48

$4.73

$3.05

$2.93

37) The following per unit information is available for a new product of Swifty Corporation:

Desired ROI	$10
Fixed cost	40
Variable cost	60
Total cost	100
Selling price	110

Swifty Corporation’s markup percentage would be

10%.

9%.

55%.

36%.

Thank You So Much for any help!

Answer 1

39) we will first find the ratio of supply clerk's wages as compared to material cost

=($19,000+4,000+22,000)/$180,000

=0.25

Total mark up on material cost = 0.25+0.15 profit

0.40 = 40%

Now, we will find consultant wages per hour

= Total cost/ consultant hours + profit per hour

=($90,000+22,500+17,500)/5,000 + $20 profit per hour

=$46 per hour

Billed

Activity	OH rate	Cost driver	Total bileld amount
Consultant	$46 per hour	20 hours	$920 *($46*20)
Material	140% of material cost	$180 material cost	$252($180*140%)
		Total	$1,172

Answer=B

35) Desired ROI per pair of shoes

Net income targeted = Investment*ROI

=$1,700,000*30%

=$510,000

Desired ROI = Target Income/ number of shoes

=$510,000/5,000

=$102 per pair of shoe

Answer B

36) Target sales = FIxed cost+variable cost+targeted net income

=$312,500+450,000+($3,000,000*14%)

=$762,500+420,000

=$1,182,500

Selling price per unit= target sales/ number of uni

=$1,182,500/250,000

=$4.73 per unit

Answer B

37)Mark up percentage = profit/cost * 100

=$10/($40+$60)*100

=0.10*100

=10%

Answer A)

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