PROBLEM 4. The particulars relating to 1,200 kgs. of a certain raw material purchased by a company during June were as follows : (a) Lot prices quoted by supplier and accepted by the company for placing the purchase order : Lot upto 1,000 kgs. @ 22 per kg. Between 1,000-1,500 kgs. @$ 20 per kg. Between 1,500-2,000 kgs. @ $ 18 per kg. F.O.R. Supplier's Factory (b) Trade discount 20%. (c) Additional charge for containers @ $ 10 per drum of 25 kgs. (d) Credit allowed on return of containers @ $ 8 per drum. (e) Sales tax at 10% on raw material and 5% ön drums. () Total freight paid by the purchaser $ 240. (g) Insurance at 2.5% (on net invoice value) paid by the purchaser. (h) Stores overhead applied at 5% on total purchase cost of material. The entire quantity was received and issued to production. The containers are returned in due course. Draw up a suitable statement to show: (a) Total cost of material purchased ; and (b) Unit cost of material issued to production.

PROBLEM 4. The particulars relating to 1,200 kgs. of a certain raw material purchased by a company during June were as follows : (a) Lot prices quoted by supplier and accepted by the company for placing the purchase order : Lot upto 1,000 kgs. @ 22 per kg. Between 1,000-1,500 kgs. @$ 20 per kg. Between 1,500-2,000 kgs. @ $ 18 per kg. F.O.R. Supplier's Factory (b) Trade discount 20%. (c) Additional charge for containers @ $ 10 per drum of 25 kgs. (d) Credit allowed on return of containers @ $ 8 per drum. (e) Sales tax at 10% on raw material and 5% ön drums. () Total freight paid by the purchaser $ 240. (g) Insurance at 2.5% (on net invoice value) paid by the purchaser. (h) Stores overhead applied at 5% on total purchase cost of material. The entire quantity was received and issued to production. The containers are returned in due course. Draw up a suitable statement to show: (a) Total cost of material purchased ; and (b) Unit cost of material issued to production.

Name: PROBLEM 4. The particulars relating to 1,200 kgs. of a certain raw ma
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Description: PROBLEM 4. The particulars relating to 1,200 kgs. of a certain raw material purchased by acompany during June were as follows :(a) Lot prices quoted by supplier and accepted by the company for placing the purchase order :Lot upto 1,000 kgs. @ 22 per

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter12: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 12.16E: Product cost concept of product pricing Based on the data presented in Exercise 12-15, assume that...

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Product cost concept of product pricing Based on the data presented in Exercise 12-15, assume that Willis Products Inc. uses the product cost concept of applying the cost-plus approach to product pricing. a.Determine the total manufacturing costs and the cost amount per unit for the production and sale of 200,000 units. b.Determine the product cost markup percentage per unit. Round to two decimal place. c.Determine the selling price per unit. Round to the nearest dollar.
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