Bundle: Managerial Accounting, Loose-leaf Version, 14th - Book Only
14th Edition
ISBN: 9781337541398
Author: Carl Warren; James M. Reeve; Jonathan Duchac
Publisher: Cengage Learning
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Chapter 6, Problem 3TIF
To determine
Contribution Margin
Contribution margin is the excess of manufacturing margin above selling and administrative expenses. Contribution margin is calculated by deducting the variable cost from sales or deducting variable selling and administrative expenses from manufacturing margin.
To prepare: A memo for evaluating the performance of the salespeople and recommend to improve profitability.
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Total Cost Concept of Product Pricing
Smart Stream Inc. uses the total cost concept of applying the cost-plus approach to product pricing. The costs of producing and selling 8,500 units of cellular phones are as follows:
Variable costs:
Fixed costs:
Direct materials
$ 73
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Factory overhead
$314,500
Direct labor
34
Selling and admin. exp.
110,500
Factory overhead
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Selling and admin. exp.
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a. Determine the total costs and the total cost amount per unit for the production and sale of 8,500 units of cellular phones. Round the cost per unit to two decimal places.
Total costs
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b. Determine the total cost markup percentage (rounded to two decimal places) for cellular phones. %
c. Determine the selling price of cellular phones.…
Total Cost Concept of Product Pricing
Smart Stream Inc. uses the total cost concept of applying the cost-plus approach to product pricing. The costs of producing and selling 8,500 cellular phones are as follows:
Variable costs:
Fixed costs:
Direct materials
$ 71
Factory overhead
$301,900
Direct labor
33
Selling and administrative expenses
106,100
Factory overhead
21
Selling and administrative expenses
17
Total
$142
Smart Stream wants a profit equal to a 16% rate of return on invested assets of $767,130.
a. Determine the total costs and the total cost amount per unit for the production and sale of 8,500 units of cellular phones.
Total costs
$fill in the blank
Cost amount per unit
$fill in the blank
b. Determine the total cost markup percentage for cellular phones. Rounded to two decimal places.fill in the blank %
c. Determine the selling price of cellular phones. Round to the nearest cent.$fill in the…
Total Cost Concept of Product Pricing
Smart Stream Inc. uses the total cost concept of applying the cost-plus approach to product pricing. The costs of producing and selling 6,500 units of cellular phones are as follows:
Variable costs:
Fixed costs:
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Factory overhead
$279,000
Direct labor
39
Selling and admin. exp.
98,000
Factory overhead
26
Selling and admin. exp.
20
Total
$170
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Smart Stream wants a profit equal to a 16% rate of return on invested assets of $833,630.
a. Determine the total costs and the total cost amount per unit for the production and sale of 6,500 units of cellular phones. Round the cost per unit to two decimal places.
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$fill in the blank 1
Cost amount per unit
$fill in the blank 2
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Chapter 6 Solutions
Bundle: Managerial Accounting, Loose-leaf Version, 14th - Book Only
Ch. 6 - What types of costs are customarily included in...Ch. 6 - Which type of manufacturing cost (direct...Ch. 6 - Which of the following costs would be included in...Ch. 6 - In the variable costing income statement, how are...Ch. 6 - Prob. 5DQCh. 6 - Discuss how financial data prepared on the basis...Ch. 6 - Prob. 7DQCh. 6 - Explain why rewarding sales personnel on the basis...Ch. 6 - Prob. 9DQCh. 6 - Prob. 10DQ
Ch. 6 - Explain why service companies use different...Ch. 6 - Prob. 1BECh. 6 - Prob. 2BECh. 6 - Prob. 3BECh. 6 - Prob. 4BECh. 6 - Contribution margin by segment The following...Ch. 6 - Prob. 6BECh. 6 - Prob. 1ECh. 6 - Prob. 2ECh. 6 - Prob. 3ECh. 6 - Prob. 4ECh. 6 - Variable costing income statement On November 30,...Ch. 6 - Absorption costing income statement On March 31....Ch. 6 - Prob. 7ECh. 6 - Prob. 8ECh. 6 - Prob. 9ECh. 6 - Prob. 10ECh. 6 - Prob. 11ECh. 6 - Prob. 12ECh. 6 - Prob. 13ECh. 6 - Prob. 14ECh. 6 - Prob. 15ECh. 6 - Prob. 16ECh. 6 - Prob. 17ECh. 6 - Prob. 18ECh. 6 - Prob. 19ECh. 6 - Variable costing income statement for a service...Ch. 6 - Prob. 21ECh. 6 - Variable costing income statement for a service...Ch. 6 - Prob. 1PACh. 6 - Prob. 2PACh. 6 - Prob. 3PACh. 6 - Salespersons report and analysis Walthman...Ch. 6 - Prob. 5PACh. 6 - Prob. 6PACh. 6 - Absorption and variable costing income statements...Ch. 6 - Income statements under absorption costing and...Ch. 6 - Absorption and variable costing income statements...Ch. 6 - Prob. 4PBCh. 6 - Prob. 5PBCh. 6 - Prob. 6PBCh. 6 - Prob. 1ADMCh. 6 - Prob. 2ADMCh. 6 - Prob. 3ADMCh. 6 - Prob. 4ADMCh. 6 - Prob. 1TIFCh. 6 - Inventory effects under absorption costing BendOR,...Ch. 6 - Prob. 3TIF
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