PROBLEM 1: Morales Corporation produces microwave ovens. The following per unit

Question

PROBLEM 1:
Morales Corporation produces microwave ovens. The following per unit cost information is available: direct materials $40, direct labor $25, variable manufacturing overhead $14, fixed manufacturing overhead $39, variable selling and administrative expenses $13, and fixed selling and administrative expenses $29. Its desired ROI per unit is $28. Compute the markup percentage using absorption-cost pricing. (Round answer to 2 decimal places, e.g. 10.50%.)

WHAT IS THE MARKUP PERCENTAGE?

PROBLEM 2:
Morales Corporation produces microwave ovens. The following per unit cost information is available: direct materials $33, direct labor $23, variable manufacturing overhead $16, fixed manufacturing overhead $48, variable selling and administrative expenses $16, and fixed selling and administrative expenses $26. Its desired ROI per unit is $29. Compute the markup percentage using variable-cost pricing. (Round answer to 2 decimal places, e.g. 10.50%.)

WHAT IS THE MARKUP PERCENTAGE?

PROBLEM 3:

Exercise 8-7 (Part Level Submission)

(a)

Exercise 8-7 (Part Level Submission)

Gibbs Corporation produces industrial robots for high-precision manufacturing. The following information is given for Gibbs Corporation.
Per Unit Total Direct materials $420 Direct labor $320 Variable manufacturing overhead $  73 Fixed manufacturing overhead $1,814,800 Variable selling and administrative expenses $  60 Fixed selling and administrative expenses $  561,890
The company has a desired ROI of 21%. It has invested assets of $61,424,000. It anticipates production of 3,490 units per year.

Explanation / Answer

1)Unit product cost under absorption costing =Direct material+direct labor variable manufacturing overhead+ fixed overhead

= 40+25+14+39

=$ 118

markup% =markup/unit cost

= 28/118

= .2373 or 23.73%

2)unit product cost under variable costing = 33+23+16

   = 72

Markup % = 29/72= .4028 or 40.28%

3)Fixed manufacturing overhead =Overhead cost /unit produced

   = 1814800/3490

= $ 520 per unit

Fixed selling and administrative expenses =561890/3490 =$ 161 per unit

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