GIVEN: Kann Corporation produces industrial robots forhigh-precision manufacturing. The following information isavailable:
Per Unit Total
Direct materials $25.00
Direct labor $10.00
Variable manufacturing overhead $6.00
Fixed manufacturing overhead $36,000
Variable selling and administrative costs $4.00
Fixed selling and administrative costs $15,000
The company has a desired ROI of 20%. It has invested assets of$420,000. It anticipates making and selling 3,000 units peryear.
REQUIRED:
Part 1: Using the total (full) cost concept, determine the (a)unit cost amount; (b) markup percentage; and (c) unit targetselling price.
Part 2: Using the product (absorption) cost concept, determinethe (a) unit cost amount; and (b) markup percentage.
Part 3: Using the variable cost concept, determine the (a) unitcost amount; and (b) markup percentage.
Part 4: What is the target unit selling price under the threecost assumptions?
Part 5: What else should be considered when setting theproduct's selling price?
Part 6: Which of the three costing concepts would be mostappropriate in each of the following situations? 1. Externalreporting for GAAP 2. Normal (long-run) pricing 3. Evaluatingspecial orders
Part 7: Kann Corporation received a special order for 500 robotsat $50 each from a foreign customer. Acceptance of the order wouldincrease variable selling costs by $1.70 per unit because ofshipping costs, but would not increase fixed costs or interferewith any current orders. Prepare a differential analysis todetermine whether the special order should be accepted or not.
My school has no tutors for this; I will post what little Ihave, and attempt more myself, but I really do not know what I'mdoing. I do not know how these figures that I have weredetermined:
Full cost for 3000 units Absorption cost for 3000units Variable costs for 3000units Direct materials $75,000 $75,000 $75,000 Direct labor 30,000 30,000 30,000 Variable manufacturingoverhead 18,000 18,000 18,000 Fixed manufacturingoverhead 36,000 36,000 Variable selling overhead 12,000 12,000 Fixed selling overhead 15,000 Total cost 186,000 159,000 135,000 Cost per unit 62 53 45 Desired profit = 42,000 *20% 84,000 84,000 84,000 Sales value 270,000 243,000 219,000 Sales price per unit 90 81 73
GIVEN: Kann Corporation produces industrial robots forhigh-precision manufacturing. The following information isavailable:
Per Unit Total
Direct materials $25.00
Direct labor $10.00
Variable manufacturing overhead $6.00
Fixed manufacturing overhead $36,000
Variable selling and administrative costs $4.00
Fixed selling and administrative costs $15,000
The company has a desired ROI of 20%. It has invested assets of$420,000. It anticipates making and selling 3,000 units peryear.
REQUIRED:
Part 1: Using the total (full) cost concept, determine the (a)unit cost amount; (b) markup percentage; and (c) unit targetselling price.
Part 2: Using the product (absorption) cost concept, determinethe (a) unit cost amount; and (b) markup percentage.
Part 3: Using the variable cost concept, determine the (a) unitcost amount; and (b) markup percentage.
Part 4: What is the target unit selling price under the threecost assumptions?
Part 5: What else should be considered when setting theproduct's selling price?
Part 6: Which of the three costing concepts would be mostappropriate in each of the following situations? 1. Externalreporting for GAAP 2. Normal (long-run) pricing 3. Evaluatingspecial orders
Part 7: Kann Corporation received a special order for 500 robotsat $50 each from a foreign customer. Acceptance of the order wouldincrease variable selling costs by $1.70 per unit because ofshipping costs, but would not increase fixed costs or interferewith any current orders. Prepare a differential analysis todetermine whether the special order should be accepted or not.
My school has no tutors for this; I will post what little Ihave, and attempt more myself, but I really do not know what I'mdoing. I do not know how these figures that I have weredetermined:
| Full cost for 3000 units | Absorption cost for 3000units | Variable costs for 3000units | |||||||||
| Direct materials | $75,000 | $75,000 | $75,000 | ||||||||
| Direct labor | 30,000 | 30,000 | 30,000 | ||||||||
| Variable manufacturingoverhead | 18,000 | 18,000 | 18,000 | ||||||||
| Fixed manufacturingoverhead | 36,000 | 36,000 | |||||||||
| Variable selling overhead | 12,000 | 12,000 | |||||||||
| Fixed selling overhead | 15,000 | ||||||||||
| Total cost | 186,000 | 159,000 | 135,000 | ||||||||
| Cost per unit | 62 | 53 | 45 | ||||||||
| Desired profit = 42,000 *20% | 84,000 | 84,000 | 84,000 | ||||||||
| Sales value | 270,000 | 243,000 | 219,000 | ||||||||
| Sales price per unit | 90 | 81 | 73 | ||||||||
Related questions
| 1 | Variable costs per unit: | |
| 2 | Direct materials | $121.00 |
| 3 | Direct labor | 28.00 |
| 4 | Factory overhead | 49.00 |
| 5 | Selling and administrative expenses | 37.00 |
| 6 | Total | $235.00 |
| 7 | Fixed costs: | |
| 8 | Factory overhead | $254,000.00 |
| 9 | Selling and administrative expenses | 147,000.00 |
1. Determine the amount of desired profit from the production and sale of flat panel displays.
2. Assuming that the product cost concept is used, determine (a) the cost amount per unit, (b) the markup percentage (rounded to two decimal places), and (c) the selling price of flat panel displays.
| Cost amount per unit | |
| Markup percentage | % |
| Selling price |
3. (Appendix) Assuming that the total cost concept is used,determine (a) the cost amount per unit, (b) the markup percentage (rounded to two decimal places), and (c) the selling price of flat panel displays.
| Cost amount per unit | |
| Markup percentage | % |
| Selling price |
4. (Appendix) Assuming that the variable cost concept is used, determine (a) the cost amount per unit, (b) the markup percentage (rounded to two decimal places), and (c) the selling price of flat panel displays.
| Cost amount per unit | |
| Markup percentage | % |
| Selling price |
5. Comment on any additional considerations that could influence establishing the selling price for flat panel displays.
The cost-plus approach price of $360_should/should not____ be viewed as a general guideline for establishing long-run normal prices. Other considerations, such as the price of competing products and general economic conditions of the marketplace, __(could/will)______ lead management to establish a short-run price more or less than $360.
