Managerial Accounting
6th Edition
ISBN: 9781259726972
Author: John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher: McGraw-Hill Education
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Chapter 10, Problem 7E
Exercise 23-11 Sales mix A1
Childress Company produces three products, K1, S5, and G9. Each product uses the same type of direct material. K1 uses 4 pounds of the material, $5 uses 3 pounds of the material, and G9 uses 6 pounds of the material. Demand for all products is strong, but only 50,000 pounds of material are available. Information about the selling price per unit and variable cost per unit of each product follows. Orders for which product should be produced and filled first, then second, then third? Support your answer.
| K1 | $5 | G9 | |
| Selling price………………………… | $160 | $112 | $210 |
| Variable costs………………………. | 96 | 85 | 144 |
Check K1 contribution margin per pound, $16
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Problem 23-3B Sales mix strategies P3
Sung Company produces two models of its product with the same machine. The machine has a capacity of 200 hours per month. The
following information is available.
Selling price per unit
Variable costs per unit
Contribution margin per unit
Machine hours per unit
Maximum unit sales per month
Standard
$60
20
$40
1 hour
550 units
Pro
$80
30
$50
2 hours
175 units
Required
1. Determine the contribution margin per machine hour for each model.
2. How many units of each model should the company produce? How much total contribution margin does this mix produce per month?
3. Assume the maximum demand for the Standard model is 180 units (not 550 units). How many units of each model should the
company produce? How much total contribution margin does this mix produce per month?
QS 23-18 Product pricing using variable costs LO P6
GoSnow sells snowboards. Each snowboard requires direct materials of $110, direct labor of $35, and variable overhead of $45. The company expects fixed overhead costs of $265,000 and fixed selling and administrative costs of $211,000 for the next year. The company has a target profit of $200,000. It expects to produce and sell 10,000 snowboards in the next year. Compute the selling price using the variable cost method. (Do not round your intermediate calculations. Round your final answer to 2 decimal places.)
Exercise I-Set B
Palawan Company must determine a target selling price for one of its
products. Cost data relating to the product are as follows:
Per Unit
P 30
Direct materials
Direct labor
Variable manufacturing overhead
Fixed manufacturing overhead
Variable administrative and selling expenses
15
5
Fixed administrative and expenses
40
The costs above are based on an anticipated volume of 70,000 units
produced and sold each period. The company uses cost-plus pricing, and it has a
policy of obtaining target selling prices by adding a markup of 50% of unit
manufacturing cost or by adding a markup of 80% of variable costs.
Required: 1. Compute the target selling price per unit using absorption costing.
2. Compute the target selling price per unit using contribution costing.
Chapter 10 Solutions
Managerial Accounting
Ch. 10 - Prob. 1MCQCh. 10 - Prob. 2MCQCh. 10 - Prob. 3MCQCh. 10 - Prob. 4MCQCh. 10 - Prob. 5MCQCh. 10 - Prob. 1DQCh. 10 - Is nonfinancial information ever useful in...Ch. 10 - What is a relevant cost? Identify the two types of...Ch. 10 - Prob. 4DQCh. 10 - Prob. 5DQ
Ch. 10 - Prob. 6DQCh. 10 - Prob. 7DQCh. 10 - Prob. 8DQCh. 10 - Prob. 9DQCh. 10 - Prob. 10DQCh. 10 - Explain how a price-setter differs from a...Ch. 10 - Prob. 12DQCh. 10 - Prob. 1QSCh. 10 - Prob. 2QSCh. 10 - Prob. 3QSCh. 10 - Prob. 4QSCh. 10 - Prob. 5QSCh. 10 - Prob. 15QSCh. 10 - Prob. 6QSCh. 10 - Prob. 7QSCh. 10 - Prob. 10QSCh. 10 - Prob. 8QSCh. 10 - Prob. 9QSCh. 10 - Prob. 11QSCh. 10 - Prob. 12QSCh. 10 - Prob. 13QSCh. 10 - Prob. 14QSCh. 10 - Prob. 16QSCh. 10 - Prob. 17QSCh. 10 - Prob. 18QSCh. 10 - Raju is & price-taker in a competitive product...Ch. 10 - Prob. 20QSCh. 10 - Prob. 21QSCh. 10 - Prob. 1ECh. 10 - Exercise 23-5 Make or buy A1 Gelb Company...Ch. 10 - Prob. 3ECh. 10 - Prob. 4ECh. 10 - Prob. 5ECh. 10 - Prob. 6ECh. 10 - Exercise 23-11 Sales mix A1 Childress Company...Ch. 10 - Prob. 8ECh. 10 - Prob. 9ECh. 10 - Prob. 10ECh. 10 - Prob. 11ECh. 10 - Prob. 12ECh. 10 - Prob. 13ECh. 10 - Exercise 23-3 Accept new business or nor...Ch. 10 - Prob. 15ECh. 10 - Prob. 1PSACh. 10 - Prob. 2PSACh. 10 - Prob. 3PSACh. 10 - Prob. 4PSACh. 10 - Prob. 5PSACh. 10 - Prob. 6PSACh. 10 - Prob. 1PSBCh. 10 - Prob. 2PSBCh. 10 - Prob. 3PSBCh. 10 - Prob. 4PSBCh. 10 - Prob. 5PSBCh. 10 - Prob. 6PSBCh. 10 - Prob. 10SPCh. 10 - Assume Apple is designing a new smartphone. Each...Ch. 10 - Prob. 2AACh. 10 - Assume Samsung is designing a new smartphone. Each...Ch. 10 - Prob. 1BTNCh. 10 - Prob. 2BTNCh. 10 - Prob. 3BTNCh. 10 - Prob. 4BTNCh. 10 - Prob. 5BTNCh. 10 - Prob. 6BTN
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