Question

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

Related Solutions

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...
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
The following are misstatements that have occured in Merry Accessories Ltd., a trading company selling handbags...
The following are misstatements that have occured in Merry Accessories Ltd., a trading company selling handbags and accessories: 1. The order clerk placed purchase orders for accessories items; however, it was discovered that only purchase orders above $3000 required authorization. The order clerk regularly placed order for personal goods up to value of $3000. 2. When goods were received, the warehouse department verified the quantity to the suppliers despatch note and checked the quality of the goods received. The warehouse...
The country of La la land has an agrarian economy and only produces food on a...
The country of La la land has an agrarian economy and only produces food on a fixed supply of land. The production of food per person hasn’t increased for a very long time even though better fertilizers have become available. Seeing this an economist tries to understand the country’s predicament using a mathematical model. Production in the model is given by a function that combines land and labor in the following way. Y = AL0.3N 0.7 Everything that is produced...
In addition to? footwear, Kenneth Cole Productions designs and sources? handbags, apparel, and other accessories. You?...
In addition to? footwear, Kenneth Cole Productions designs and sources? handbags, apparel, and other accessories. You? decide, therefore, to consider comparables for KCP outside the footwear industry. You also know the following about? KCP: it has sales of $518 ?million, EBITDA of $55.6 ?million, excess cash of $100 ?million, $3 million of? debt, EPS of $1.65?, book value of equity of $12.05 per? share, and 21 million shares outstanding. a. Suppose that? Fossil, Inc., has an enterprise value to EBITDA...
In addition to​ footwear, Kenneth Cole Productions designs and sources​ handbags, apparel, and other accessories. You​...
In addition to​ footwear, Kenneth Cole Productions designs and sources​ handbags, apparel, and other accessories. You​ decide, therefore, to consider comparables for KCP outside the footwear industry. You also know the following about​ KCP: it has sales of $ 518 ​million, EBITDA of $ 55.6 ​million, excess cash of $ 100 ​million, $ 3 million of​ debt, EPS of $ 1.65​, the book value of equity of $ 12.05 per​ share, and 21 million shares outstanding. a. Suppose that​ Fossil,...
The Stetson Group, a leading producer of custom women's accessories, has hired you to estimate the...
The Stetson Group, a leading producer of custom women's accessories, has hired you to estimate the firm's weighted average cost of capital. The balance sheet and some other information are provided below.   Assets Current assets $7,780,000 Net plant, property, and equipment 131,230,000 Total assets $139,010,000   Liabilities and Equity Accounts payable $10,003,000 Accruals 9,007,000 Current liabilities $19,010,000 Long-term debt (30,000 bonds, $1,000 par value) 30,000,000 Total liabilities $49,010,000 Common stock (10,000,000 shares) 40,000,000 Retained earnings 50,000,000 Total shareholders' equity 90,000,000 Total...
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...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT