Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

In the previous period,Amazon company produced 13,750 units. Total costs and unit costs incurred were as follows: Statements Total Costs Unit Costs Variable production costs

In the previous period,Amazon company produced 13,750 units. Total costs and unit costs incurred were as follows:

Statements

Total Costs

Unit Costs

Variable production costs

Direct materials and parts

188,500

13.73

Direct labor

60,000

4.36

Variable manufacturing overhead

44,250

3.21

Total variable production costs

292,750

21.30

Fixed manufacturing overhead

154,875

11.26

Total production costs

447,625

32.56

Selling, general, and administrative expenses

Selling expenses

73,750

5.36

General expenses

36,875

2.68

Administrative expenses

22,125

1.61

Total selling, general, and administrative expenses

132,750

9.65

Total costs and expenses

580,375

42.20

No changes in unit costs are expected this period. Desired profit for the period is $110,625. The company uses assets totalling $921,875 in producing a 14% return on those assets.

Instructions: Compute the price of Amazon using the following methods:

1. Gross margin pricing method?

2. Return on assets pricing method?

Type or paste question here

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Statement Fraud Casebook Baking The Ledgers And Cooking The Books

Authors: Joseph T. Wells

1st Edition

0470934417, 978-0470934418

More Books

Students also viewed these Accounting questions