Product Cost Method of Product Pricing La Femme Accessories Inc. produces women\

Question

Product Cost Method of Product Pricing

La Femme Accessories Inc. produces women's handbags. The cost of producing 1,180 handbags is as follows:

The selling and administrative expenses are $29,000. The management desires a profit equal to 18% of invested assets of $496,000.

If required, round your answers to nearest whole number.

a. Determine the amount of desired profit from the production and sale of 1,180 handbags.
$

b. Determine the product cost per unit for the production of 1,180 handbags.
$per unit

c. Determine the product cost An amount that is added to a cost amount to determine product price.markup percentage for handbags.
%

d. Determine the selling price of handbags. Round your answers to nearest whole value.

Explanation / Answer

Dear Student Thank you for using Chegg Please find below the answer and please give thumbs up   Statementshowing Computations Paticulars Amount 1) Invested Assets               496,000.00 18% of invested assets = 496000*.18                 89,280.00 Profit per unit =89280/1180                         75.66 2) Direct Materials                 14,400.00 Direct Labour                   7,800.00 Factory overhead                   5,700.00 Total manufacturing cost                 27,900.00 No of units                   1,190.00 product cost per unit                         23.45 Selling and admin expense per unit=29000/1180                         24.58 Total cost per unit =23.45 + 24.58                         48.02 Mark up% = 75.66/48.02 157.56% 4) Cost per unit                         48.02 Mark up per unit                         75.66 Selling price per unit                       123.68

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