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Unformatted text preview: E9-16Variable costs: Ice cream $0.25 Franchise fee 0.10Total$.35Total revenue = Fixed costs + Variable costs + Profit Price × 24,000 = $5,250 + ($0.35 × 24,000) + $7,000 Price = $0.87per cone Note: Must round up or else total profit will be slightly less than $7,000. 338 Product Pricing, Target Costing, and Quality Management 339E9-17 a.Current variable manufacturing costs per unit ($480,000/12,000) $40 Expected increase per unit 8Expected variable manufacturing costs per unit $48 Current and expected variable selling and administrative cost per unit ($132,000/12,000) 11Expected variable costs $59Current fixed manufacturing overhead $520,000 Expected increase 48,000Expected fixed manufacturing overhead $568,000 Current and expected fixed selling and administrative costs 210,000Expected fixed costs $778,000Revenue = Fixed costs + Variable costs + Profit Price × 12,000 = $778,000 + ($59 × 12,000) + $98,000 Price = ($778,000 + 708,000 + $98,000)/12,000 = $132b.Selling price $107 Vari...
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This homework help was uploaded on 02/19/2008 for the course H ADM 221 taught by Professor Gpotter during the Spring '05 term at Cornell.
- Spring '05