Question
Bluebird Inc. uses the product cost concept of applying the cost-plus approach to product pricing. The costs and expenses of producing 25,000 units of Product
Bluebird Inc. uses the product cost concept of applying the cost-plus approach to product pricing. The costs and expenses of producing 25,000 units of Product K are as follows:
Variable costs: $2.50
Direct Materials 4.25
Direct Labor 1.25
Factory Overhead 0.50
Total: 8.50
Fixed Costs $25,000
Selling and Administrative expenses 17,000
Bluebird desires a profit equal to a 5% rate of return on invested assets of $642,500
a) determine the amount of desired profit from the production and sale of Product K
b) determine the total manufacturing costs and the cost amount per unit for the production of 25,000 units of Product K
c) determine the markup percentage of Product K
d) determine the selling price of Product K
Round your markup percentage to one decimal place, and other intermediate calculations and final answer to two decimal places. SHOW WORK
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started