The Razooks Company, which manufactures office equipment, is ready to introduce
ID: 2480819 • Letter: T
Question
The Razooks Company, which manufactures office equipment, is ready to introduce a new line of portable copiers. The following copier data are available: Variable manufacturing cost $ 181
Applied fixed manufacturing cost 91
Variable selling and administrative cost 61
Allocated fixed selling and administrative cost 76
12.
value:
3.00 points
Required information
What price will the company charge if the firm uses cost-plus pricing based on variable manufacturing cost and a markup percentage of 215%?
$389.15
$490.20
$570.15
$637.65
None of these.
13.
value:
3.00 points
Required information
What price will the company charge if the firm uses cost-plus pricing based on total variable cost and a markup percentage of 175%?
$138.29.
$423.50.
$380.29.
$665.50.
None of these.
14.
value:
3.00 points
Required information
What price will the company charge if the firm uses cost-plus pricing based on absorption manufacturing cost and a markup percentage of 125%?
$544.50.
$749.25.
$612.00.
$920.25.
None of these.
Explanation / Answer
12)
Variable manufacturing cost = $181 per unit
Mark up percentage = 215%
Price to be charged = 181 + 215% of 181 = $570.15
13)
Variable cost
= Variable manufacturing cost + Variable selling and administrative cost
= $181 + $61
= $242
Price to be charged
= variable cost + mark up
= $242 + 175% of $242
= $423.50
14)
Manufacturing Cost of the product = Variable manufacturing cost + Applied fixed manufacturing cost
= $181 + $91
= $272
Price = Manufacturing cost + mark up = $272 + 125% of $272 = $612
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