A product cost is composed of the following direct

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Quantitative Methods for Business
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Chapter 8 / Exercise 26
Quantitative Methods for Business
Anderson/Sweeney
Expert Verified
23) A product cost is composed of the following:Direct materials$11Direct labor$3Manufacturing overhead$8The product sells for $40 and a 15% commission is paid to a salesperson for every unit sold. Management accountants also estimate that storage cost per unit averages $0.75 perunit. What is the full cost of the product?A) $14B) $22C) $28.75D) $28.00Answer: Explanation: $11 + $3 + $8 + ($40 x 15%) + $0.75 = $28.75
C
Diff: 2Objective: 2AACSB: Analytical thinking
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Quantitative Methods for Business
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Chapter 8 / Exercise 26
Quantitative Methods for Business
Anderson/Sweeney
Expert Verified
24) Crandle Manufacturers Inc. is approached by a potential customer to fulfill a one-time-only special order for a product similar to one offered to domestic customers. The company has excess capacity. The following per unit data apply for sales to regular customers:Variable costs:Direct materials$130Direct labor110Manufacturing support125Marketing costs65Fixed costs:Manufacturing support175Marketing costs85Total costs690Markup (50%)345Targeted selling price$1,035What is the full cost of the product per unit?
C
Diff: 3Objective: 2AACSB: Application of knowledge
25) Crandle Manufacturers Inc. is approached by a potential new customer to fulfill a one-time-only special order for a product similar to one offered to domestic customers. The company has excess capacity. The following per unit data apply for sales to regular customers:Variable costs:Direct materials$170Direct labor90Manufacturing support135Marketing costs85Fixed costs:Manufacturing support145Marketing costs75Total costs700Markup (40%)280Targeted selling price$980What is the contribution margin per unit?
C
Diff: 3Objective: 2AACSB: Application of knowledge
26) Crandle Manufacturers Inc. is approached by a potential customer to fulfill a one-time-only special order for a product similar to one offered to domestic customers. The company has excess capacity. The following per unit data apply for sales to regular customers:Variable costs:Direct materials$140Direct labor100Manufacturing support105Marketing costs55Fixed costs:Manufacturing support175Marketing costs65Total costs640Markup (50%)320Targeted selling price$960For Crandle Manufacturers Inc., what is the minimum acceptable price of this special order?
A
Diff: 3Objective: 2AACSB: Analytical thinking

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