In: Accounting
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
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 |