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In: Accounting

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 unit for the production of 1,240 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

a Determine the amount of desired profit from the production and sale of 1240 handbags.
Invested Assets $496,000
Desired return on asset 14%
Desired profit $69,440
b Determine the product cost per unit for the production of 1240 handbags.
Direct Material $14,300
Direct Labor $8,500
Factory overhead $6,000
$28,800
Units 1240
Cost per unit $23
c Determine the product cost markup percentage of handbags.
Desired profit $69,440
Selling and administrative expenses $28,900
Desired gross profit $98,340
Desired gross profit per unit $79
Markup percentage 341%
d Determine the selling price of handbags
Cost per unit $23
Markup per unit $79
Selling price per unit $102

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