The management estimates that the following costs and activity would be associated with the manufacture and sale of product XYZ: Number of units sold annually→60,000; Required investment in assets→₱500,000; Unit product cost→₱35.00; Selling, general and administrative expenses→₱330,000. It the company uses the absorption costing approach to cost-plus pricing where the desired rate of return on investment (ROI) is 25% and the tax rate is 30%, the required mark-up would be closest to? a. 39.58% b. 55% c. 36% d. 43% e. 25% f. 24.23%
The management estimates that the following costs and activity would be associated with the manufacture and sale of product XYZ: Number of units sold annually→60,000; Required investment in assets→₱500,000; Unit product cost→₱35.00; Selling, general and administrative expenses→₱330,000. It the company uses the absorption costing approach to cost-plus pricing where the desired rate of return on investment (ROI) is 25% and the tax rate is 30%, the required mark-up would be closest to? a. 39.58% b. 55% c. 36% d. 43% e. 25% f. 24.23%
Chapter2: Building Blocks Of Managerial Accounting
Section: Chapter Questions
Problem 5EA: Rose Company has a relevant range of production between 10,000 and 25.000 units. The following cost...
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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The management estimates that the following costs and activity would be associated with the manufacture and sale of product XYZ: Number of units sold annually→60,000; Required investment in assets→₱500,000; Unit product cost→₱35.00; Selling, general and administrative expenses→₱330,000. It the company uses the absorption costing approach to cost-plus pricing where the desired rate of return on investment (ROI) is 25% and the tax rate is 30%, the required mark-up would be closest to?
a. 39.58% b. 55% c. 36%
d. 43% e. 25% f. 24.23%
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