Princess Company's information for producing and selling 180,000 units of crowns are as follows: (Show all your work)
Variable costs:
Direct materials
$21.00
Direct labor
$14.00
Factory overhead
$5.00
Selling and administrative expenses
$8.00
Total
$46.00
Fixed costs:
Factory overhead
$102,000
Selling and administrative expenses
$55,000
Abby desires a profit equal to a 16% rate of return on invested assets of $3,500,000.
REQUIRED:
(1)Using Variable Cost Concept of applying the cost-plus approach to product pricing:
(a)
Determine the amount of desired profit from the production and sale of Catnip.
(b)
Determine the total variable costs for the production and sale of 150,000 units of Catnip.
(c)
Determine the markup percentage for Catnip.
(d)
Determine the unit selling price of Catnip.
Round your markup percentage to one decimal place and other intermediate calculations and final answer to two decimal places.
(2)Using Total Cost Concept:
(a) Determine the markup percentage for Catnip. (Round your markup percentage to one decimal place and other intermediate calculations and final answer to two decimal places.)
(3)Using the Product Cost Concept,
(a) Determine the markup percentage for Catnip. (Round your markup percentage to one decimal place and other intermediate calculations and final answer to two decimal places.)