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Help, please with the blue highlighted areas. Thank you. Drummond Inc. competes with Grouse Inc. in the distribution of mechanical pencils. Drummond also identifies its
Help, please with the blue highlighted areas. Thank you.
Drummond Inc. competes with Grouse Inc. in the distribution of mechanical pencils. Drummond also identifies its three primary activities and cost pools as ordering, receiving and storage, and shipping, and it reports the following details for 2020 (Click the icon to view the activity and cost pool details.) For 2020, Drummond buys 250,000 pencil packs at an average cost of $2.85 per pack) Drummond plans to use cost-plus pricing Read the requirements Since Drummond is using a cost-plus pricing strategy, we must first determine the total cost and the total cost per unit of the pencil packs, Calculate the total costs and then the costs per unit. Total Per Unit 2.85 Costs: 250.000 X2.85 Purchase cost of pencil packs Ordering costs Receiving and storage 712,500 35,000 200, DOO 165,000 105 2500 Shipping Total costs Now calculate the prospective selling price (1) if Drummond marks up the purchase costs of the pencil packs by 20%. (Round any intermediary calculations and your final answer to the nearest cent.) (1) The prospective selling price of the pencil packs if Drummond marks up the purchase costs by 20% is Finally, calculate the prospective selling price (2) if Drummond marks up the full cost of the pencil packs by 6%. (2) The prospective selling price of the pencil packs if Drummond marks up the full cost by 6% is 7: Data Table Quantity of Cost per Unit of Cost Cost Driver Driver Cost Driver Number of orders 700 $50 per order Activity 1. Placing and paying for orders of pencil packs 2. Receiving and storage 3. Shipping of pencil packs to retailers 35,000 200,000 Loads moved 4,000 $50 per load Number of shipments 1,500 $70 per shipment = 105,000 8: Requirements Calculate the prospective selling price (1) if Drummond marks up the purchase costs of the pencil packs by 20% and (2) if Drummond marks up the full cost of the pencil packs by 6%Step by Step Solution
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