managerial accounting help ASAP?!?! 5) Gildersleeve Corporation manufactures a p

Question

managerial accounting help ASAP?!?!

5) Gildersleeve Corporation manufactures a product that has thefollow Per vear Per unit $6.00 5.00 4.00 Direct materials Direct labour V ariable manufacturing overhead Fixed manufacturing overhead $360,000 Variable SG&A; expenses 5.00 Fixed SG&A; expenses 120,000 The company uses the absorption costing approach to cost-plus p based on budgeted production and sales of 30,000 units per year. ricing. The pricing calculations are The company has invested $600,000 in this product and expects a return on investment of 15%. Required a) Compute the markup on absorption cost. b) Compute the target selling price of the product using the absorption costing approach. tod incom

Explanation / Answer

ans 1 Direct Material $6 Direct labor $5 Variable manufacturing overhead $4 Fixed manufacturing overhead $12 (360000/30000) Unit product cost $27 Markup on absorption costing 44.44 % ((15%*600000)+((5*30000)+120000)/(30000*27) ans 2 Target selling price $ 27+(27*44.44%) 39.00

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