Chapter 25 Homework (Application) altock Product Pricing using the Cost Plus Approach Methods: Differential Analysis for Accepoing Aditional Business Crystal Displays Inc. recently began production of a new product, at mays, which required the investment of $1.500,000 insets. The cost of producing and in 5.000 unit of fat panel pays are estimated as follows: Variable costs per unit: Direct materials Direct labor Factory overhead Sering and administrative expenses Total variable cost per Fred costs: Factory overhead Selling and administrative expenses 1250,000 150,000 $120 30 50 35 $235 Crystal Displays Inc. is currently considering establishing a seling price for flat panel plays. The president of Crystal Displays has decided to use the cost plus proach to product pricing and has indicated that the displays must am a 15% return on investedet Required: Note: Round wilt markup percentages to two decimal places, it required. Round all costs per unit and selling prices per unit to the nearest whole dotter 1. Determine the amount of desired profit from the production and sale of fat panel displays 2. Assuming that the proud mod is used determine the following: .. Product contamount per un D. Markup percentage c. Selling price per un 3. Appendo) Assuming that the total como se determine the following Cox My Work mor Check My Wonemaning Previous Ned> Annet Score All worked mer Sus for it Chapter 26 Homework (Application) book 3. (Appendix) Assuming that the total cost method is used determine the following 3. Total cost amount per unit b. Marko percentage c. Selling price per un 4. Appendix Assuming that the valle cost method is used determine the following: Variable cost amount per unit Markup percentage Selling price per unit 5. The cost-plus approach price computed above should be viewed as a guideline forelihing long run normal price however, other considerations such as management tools a diferent short-tun price coad 6. Atture that as of August 13,000 units of flat panelys have been produced and sold Ouring the current year. Analysis of the comestic market indicates that 2.000 dtional units are expected to be during the remainder of the year at the normal product price determined under the product cost method On August, Crystal Displays Inc received an offer from Maple Leather for 100 units of a displays at 5325, Maple Leaf Visual Inc. will market the units in Canada unders own brand name, and no variableting and administrative with me sale will be hurred by Crystal Displays Inc. The additional business is not expected to affect the domestic sales of flat panel play, and the actional unit could be produced using acting actory, seting and minestrative a Prepare a differential analysis of the proposal to Maple Leaf Inc. tannter, enter Differential Analysis Reject (A. 1) or Accept (Alt. 2) Order August 3 Reject Accept Differential Order Order Effects (Alternative 1) (Alternative 2) (Alternative 2) Revenues Previous Cho My Work Cho My Working Som for AR Work Assignment Score BO 5 8 g Chapter 25 Homework (Application) b. Markup percentage c. Selling price per unit S. The cost-phat approach price computed above should be viewed as a generar pulteline for establering long run normal pricest however, they considerations, such as ca management to establish a different short-run price the price of competing products and gereconomic conditions of the malce 6. Assume that as of August 13,000 units of flat panel displays have been produced and solduring the current year, fed concurred and deprecationen during the remainder of the year at the normal product orice determined under the product cost method On August 3, Oystal Days Mereved an offer from an est une. For some of that de $225 each. Maple Leaf Visual Inc. wil market the units in Canada under its own brand name, and no variable seling and administrative pressociated with the wie incurred by Crystal Displays Inc. The additional business is not expected to affect the domestic as of natural plays and the additional units could be produced using existing factory, celing and administrative party Prepare a differential analysis of the proposed salto Maple Leaf Inc. Imamount is er, entert Differential Analysis Reject (AR 1) or Accept (Alt. 2) Order August 3 Reject Accept Differential Order Effects (Alternative 1) (Alternative) (Alternative 2) Renes Costs Vanable manufacturing costs Order Based on the differential analysis in () should the preselected? Check My Check My Wokog Assigen er 20% All works Sabmitment for Grading esc # 3 * 5 2 4. 6 8 9 0