The following anticipated data are for the next year of operations: Per unit ($) 20 Direct material
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Question:
The following anticipated data are for the next year of operations: Per unit
($) 20
Direct material cost: ($) 20
Direct labor cost: 10
Variable production overhead 10
Variable nonproduction overhead 5
They are estimated the fixed production overhead; fixed nonproduction overhead of 5'mil 0.9 and 5'mil 0.1 respectively. There is no opening inventory; budgeted production and sales volume is 120,000 units.
Requirements:
1. Compute product cost under absorption costing and unit selling price if the markup percentage is 50% of product cost.
2. If the company want to achieve target net income of $'mil 3.6, how many percentages of margin on variable cost should be applied?
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