A company expects to produce and sell a single product.Management desires a 13% return on assets of $2,100,000.The following additional company information is available:
$\begin{array}{lr}
\text { Variable costs (per unit) }\
\text { Production costs } & \$ 62 \
\text { Nonproduction costs } & \$ 8 \
\text { Fixed costs (in total) } & \
\text { Overhead } & \$ 521,280 \
\text { Nonproduction } & \$ 397,824
\end{array}$ Required:
Compute selling price per unit given that markup percentage equals desired profit divided by total costs under the following independent assumptions:
a.The company produced and sold 19,200 units
b.The company produced and sold 114,888 units

Question

A company expects to produce and sell a single product.Management desires a 13% return on assets of $2,100,000.The following additional company information is available:
 $\begin{array}{lr}
\text { Variable costs (per unit) }\
\text { Production costs } & \$ 62 \
\text { Nonproduction costs } & \$ 8 \
\text { Fixed costs (in total) } & \
\text { Overhead } & \$  521,280  \
\text { Nonproduction } & \$  397,824
\end{array}$ Required:
Compute selling price per unit given that markup percentage equals desired profit divided by total costs under the following independent assumptions:
a.The company produced and sold 19,200 units
b.The company produced and sold 114,888 units

Quizplus · Accepted Answer

The Answer of A company expects to produce and sell a single product.Management desires a 13% return on assets of $2,100,000.The following additional company information is available:
 $\begin{array}{lr}
\text { Variable costs (per unit) }\
\text { Production costs } & \$ 62 \
\text { Nonproduction costs } & \$ 8 \
\text { Fixed costs (in total) } & \
\text { Overhead } & \$  521,280  \
\text { Nonproduction } & \$  397,824
\end{array}$ Required:
Compute selling price per unit given that markup percentage equals desired profit divided by total costs under the following independent assumptions:
a.The company produced and sold 19,200 units
b.The company produced and sold 114,888 units

A Company Expects to Produce and Sell a Single Product