Moon Company uses the variable cost method of applying the cost-plus approach to product pricing. The costs and expenses of producing and selling 75,000 units of Product T are as follows: Variable costs per unit: Direct materials Direct labor Factory overhead Selling and administrative expenses Total Fixed costs: Factory overhead Selling and administrative expenses $ 7.00 3.50 1.50 3.00 $15.00 $45,000 20,000 Moon desires a profit equal to an 18% return on invested assets of $1,440,000. a. Determine the amount of desired profit from the production and sale of Product T. b. Determine the total variable costs for the production and sale of 75,000 units of Product T. c. Determine the markup percentage for Product T. Round your answer to one decimal place. % d. Determine the unit selling price of Product T. Round your answer to two decimal places.

Moon Company uses the variable cost method of applying the cost-plus approach to product pricing. The costs and expenses of producing and selling 75,000 units of Product T are as follows: Variable costs per unit: Direct materials Direct labor Factory overhead Selling and administrative expenses Total Fixed costs: Factory overhead Selling and administrative expenses $ 7.00 3.50 1.50 3.00 $15.00 $45,000 20,000 Moon desires a profit equal to an 18% return on invested assets of $1,440,000. a. Determine the amount of desired profit from the production and sale of Product T. b. Determine the total variable costs for the production and sale of 75,000 units of Product T. c. Determine the markup percentage for Product T. Round your answer to one decimal place. % d. Determine the unit selling price of Product T. Round your answer to two decimal places.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter11: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 17E: Product cost method of product costing Smart Stream Inc. uses the product cost method of applying...

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