Question
Crystal Displays Inc. recently began production of a new product, flat panel displays, which required the investment of $1,300,000 in assets. The costs of producing
Crystal Displays Inc. recently began production of a new product, flat panel displays, which required the investment of $1,300,000 in assets. The costs of producing and selling 5,000 units of flat panel displays are estimated as follows:
1 | Variable costs per unit: |
|
2 | Direct materials | $119.00 |
3 | Direct labor | 31.00 |
4 | Factory overhead | 49.00 |
5 | Selling and administrative expenses | 36.00 |
6 | Total variable cost per unit | $235.00 |
7 | Fixed costs: |
|
8 | Factory overhead | $248,000.00 |
9 | Selling and administrative expenses | 150,000.00 |
Crystal Displays Inc. is currently considering establishing a selling price for flat panel displays. The president of Crystal Displays has decided to use the cost-plus approach to product pricing and has indicated that the displays must earn a 12% return on invested assets.
1. Determine the amount of desired profit from the production and sale of flat panel displays. $156,000.00 Points:1/1 2. Assuming that the product cost method is used, determine (a) the cost amount per unit, (b) the markup percentage, and (c) the selling price of flat panel displays. Round your markup percentage and selling price to two decimal places. Cost amount per unitS Markup percentage Selling price $345.80 Points: 1/3 3. (Appendix) Assuming that the total cost method is used, determine (a) the cost amount per unit, (b) the markup percentage, and (c) the selling price of flat panel displays. Round your markup percentage and selling price to two decimal places. Cost amount per unitS Markup percentage Selling price Points: 0/3 4. (Appendix) Assuming that the yariable cost method is used, determine (a) the cost amount per unit, (b) the markup percentage, and (c) the selling price of flat panel displays. Round your markup percentage and selling price to two decimal places. $235.00 Cost amount per unit Markup percentage Selling price 6a. Prepare a differential analysis of the proposed sale to Maple Leaf Visual Inc. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign, if there is no amount or an amount is zero, enter"O". A colon () Will automatically appear if required Differential Analysis Reject (Alternative 1) or Accept (Alternative 2) Order August 3 Differential Effect Reject Order Accept Order on Income (Alternative1 (Alternative 2) (Alternative 2) (Label)
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