Answered: Manufacturing/Materials costs $200,000…

Manufacturing/Materials costs $200,000 General/Administrative costs 50,000 Direct-labor costs Other overhead costs 170,000 60,000 Annual production demand 10,000 units

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter5: Process Costing

Section: Chapter Questions

Problem 8MC: What is the conversion cost to manufacture insulated travel cups if the costs are: direct materials,...

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Question

A company produces several product lines. One of those lines generates the following annual cost and production data: The company adds 40% to its production cost in selling to the retailer.
The retailer in turn adds a 50% profit margin when selling to its customers. How much would it cost a retailer to buy 100 units of the product?
(a) $4800
(b) $6720
(c) $7200
(d) $1008

Manufacturing/Materials costs $200,000
General/Administrative costs 50,000
Direct-labor costs
Other overhead costs
170,000
60,000
Annual production demand
10,000 units

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