(1) Broken Bay is designing a new product for the boating industry. The company believes that the product can be sold for $504; and it requires a 30% profit on new products. What is the target cost of the new product?

a. $352.80

b. $392.00

c. $490.00

d. $151.20

(2) The cost to produce phone cases by LT Ltd is $9.50 per unit. If the firm uses cost plus pricing with a 40% mark-up, what is the price of these phone cases?

a. $12.50

b. $14.80

c. $14.70

d. $13.30

(3) Morwell Ltd has supplied the following financial information which relates to production by one of the firms divisions - Division A: Direct materials $180 Direct labour $90 Variable overhead $45 Fixed overhead $72 Variable selling expenses $135 Fixed selling expenses $27 These units are normally transferred internally from Division A to Division B. The units also may be sold externally for $630 per unit. The minimum profit level accepted by the company is a markup of 30%. There were no beginning or ending inventories. What would be the transfer price if Division A uses full production cost plus markup?

a. $596.70

b. $409.50

c. $503.10

d. $387.00

(4) Swim Ltd is a manufacturer of plunge pools. The Shell Division provides fibreglass shells for the Assembly Division of a company. The standard unit costs for the Shell Division are: Direct materials $3,600 Direct labour $7,200 Variable overhead $1,800 Fixed overhead $900 Market price per unit $16,380 What is the transfer price for a fibreglass shell based on full cost plus a markup of 30%?

a. $16,380

b. $17,550

c. $16,560

d. $3,510