Linwood Company recently began production of a new navigation device, which required a capital investment of $660,000. Linwood is currently considering establishing a selling price for this new device that will ensure a 25% return on the capital investment. The engineering and the sales department compiled the following estimates for producing and selling 77,000 devices: Per Unit Total (77,000 units) Direct Materials $12 Direct Labor $26 Variable Manufacturing Overhead $14 Selling and Administrative Expenses $17 Fixed Manufacturing Overhead $223,000 General and Administrative Expenses $73,000 a) Using the cost plus pricing method, calculate the markup percentage. Absorption Cost: $Answer ?? Markup Percentage: ? % b) The company has a cost plus pricing policy that uses the absorption (full) cost as the cost base and the markup percentage calculated in part a). How much would the company charge for its new navigation device? Selling Price: ? % c) Based on a recent consumer report, the company predicts that its device cannot be priced higher than $63. At this particular price, the company believes it can sell 85,000 units and assumes the fixed costs will remain the same. Using the target costing method, calculate the total target cost and the total manufacturing cost based on 85,000 units. Total Target Cost: $Answer ?? Total Manufacturing Cost: $Answer ?? KIndly dont give handwritten answers thanku

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 6PA: Gent Designs requires three units of part A for every unit of Al that it produces. Currently, part A...

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Linwood Company recently began production of a new navigation device, which required a capital investment of $660,000. Linwood is currently considering establishing a selling price for this new device that will ensure a 25% return on the capital investment. The engineering and the sales department compiled the following estimates for producing and selling 77,000 devices: Per Unit Total (77,000 units) Direct Materials $12 Direct Labor $26 Variable Manufacturing Overhead $14 Selling and Administrative Expenses $17 Fixed Manufacturing Overhead $223,000 General and Administrative Expenses $73,000

a) Using the cost plus pricing method, calculate the markup percentage.

Absorption Cost: $Answer ??

Markup Percentage: ? %

b) The company has a cost plus pricing policy that uses the absorption (full) cost as the cost base and the markup percentage calculated in part

a). How much would the company charge for its new navigation device?

Selling Price: ? %

c) Based on a recent consumer report, the company predicts that its device cannot be priced higher than $63. At this particular price, the company believes it can sell 85,000 units and assumes the fixed costs will remain the same. Using the target costing method, calculate the total target cost and the total manufacturing cost based on 85,000 units.

Total Target Cost: $Answer ??

Total Manufacturing Cost: $Answer ??

KIndly dont give handwritten answers thanku

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