Ritner Corporation manufactures a product that has the following costs: Per Unit Per Year Direct materials $24.20 Direct labor $15.70 $ 4.10 Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses Fixed selling and administrative expenses $451,500 $ 3.50 $593,600 The company uses the absorption costing approach to cost-plus pricing as described in the text. The pricing calculations are based on budgeted production and sales of 31,000 units per year. The company has invested $362,000 in this product and expects a return on investment of 9%. Required: a. Compute the markup on absorption cost. (Round your intermediate and final answer to 2 decimal places.) b. Compute the selling price of the product using the absorption costing approach. (Round your intermediate and final answer to 2 decimal places.) 40.47 % a. Markup percentage on absorption cost b. Selling price 24 82.26

Ritner Corporation manufactures a product that has the following costs: Per Unit Per Year Direct materials $24.20 Direct labor $15.70 $ 4.10 Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses Fixed selling and administrative expenses $451,500 $ 3.50 $593,600 The company uses the absorption costing approach to cost-plus pricing as described in the text. The pricing calculations are based on budgeted production and sales of 31,000 units per year. The company has invested $362,000 in this product and expects a return on investment of 9%. Required: a. Compute the markup on absorption cost. (Round your intermediate and final answer to 2 decimal places.) b. Compute the selling price of the product using the absorption costing approach. (Round your intermediate and final answer to 2 decimal places.) 40.47 % a. Markup percentage on absorption cost b. Selling price 24 82.26

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 16E

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