(1.) Kirk Co. manufactures mobile cellular equipment and develops a price for the product by using a variable cost concept. Kirk incurs variable costs of $1,900,000 in the production of 100,000 units. Fixed costs total $50,000. The company employs $4,725,000 of assets and wishes to earn a profit equal to a 10% rate of return on assets.

a.Compute a markup percentage based on the variable costs concept. Round your answer to one decimal place.

______%

b.Determine a selling price. Round your answer to two decimal places.

$_____

(2.) Glover Inc. manufactures Product B, incurring variable costs of $15.00 per unit and fixed costs of $70,000. Glover desires a profit equal to a 12% rate of return on assets. Assets of $785,000 are devoted to producing Product B, and 100,000 units are expected to be produced and sold.

a.Compute the markup percentage using the total cost concept.

%______

b.Compute the selling price of Product B. Round your answer to two decimal places.

$____

(3.) Product J is one of the many products manufactured and sold by Gooble Company. An income statement by product line for the past year indicated a net loss for Product J of $7,250. This net loss resulted from sales of $265,000, cost of goods sold of $186,500, and operating expenses of $85,750. It is estimated that 30% of the cost of goods sold represents fixed factory overhead costs and that 40% of the operating expense is fixed. If Product J is retained, the revenue, costs, and expenses are not expected to change significantly from those of the current year. However, because of the net loss, management is considering the elimination of the unprofitable endeavor. Because of the large number of products manufactured, the total fixed costs and expenses are not expected to decline significantly if Product J is discontinued.

a differential analysis report, dated February 8 of the current year, on the proposal to discontinue Product J.

Gooble Company Proposal to Discontinue Product J February 8, 20XX Differential revenue from annual sales of product: Revenue from sales $_______

Differential cost of annual sales of product: Variable cost of goods sold$____

Variable operating expenses $_____

Annual differential income from sales of Product J$_______

(4.) FDE Manufacturing Company has a normal plant capacity of 75,000 units per month. Because of an extra large quantity of inventory on hand, it expects to produce only 60,000 units in May. Monthly fixed costs and expenses are $150,000 ($2 per unit at normal plant capacity), and variable costs and expenses are $13 per unit. The present selling price is $25 per unit. The company has an opportunity to sell 5,000 additional units at $14.30 per unit to an exporter who plans to market the product under its own brand name in a foreign market. The additional business is therefore not expected to affect the regular selling price or quantity of sales of FDE Manufacturing Company.

A differential analysis report, dated April 21 of the current year, on the proposal to sell at the special price.

FDE Manufacturing Company Proposal to Sell to Exporter April 21, 20XX

Differential revenue from accepting offer:Revenue from sale of 5,000 additional units at $14.30 $______

Differential cost of accepting offer:Variable costs and expenses of 5,000 additional units at $13 ______

Differential income from accepting offer$_____