Description
ABC Company uses the
total cost concept of applying the costplus approach to product pricing. The
costs and expenses of producing and selling 38,400 units of Product G are as
follows:
Variable costs: 

Direct materials 
$ 4.70 
Direct labor 
2.50 
Factory overhead 
1.90 
Selling and administrative expenses 
2.60 
Total 
$ 11.70 
Fixed costs: 

Factory overhead 
$80,000 
Selling and administrative expenses 
14,000 
ABC desires a profit
equal to a 14% rate of return on invested assets of $640,000.
(a) 
Determine the amount of desired profit from 
(b) 
Determine the total costs and the cost amount 
(c) 
Determine the markup percentage for Product G. 
(d) 
Determine the selling price of Product G. 
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