Question
Orange Nebula Equipment Company (ONEC) manufactures a variety of harpooning equipment. The company would like to develop a unified approach to pricing its product line
Orange Nebula Equipment Company (ONEC) manufactures a variety of harpooning equipment.
The company would like to develop a unified approach to pricing its product line for next year using cost-plus pricing but does not know what cost base should be used.
Last year, ONEC earned $150,000 of profit from sales of its products and would like to earn $225,000 next year.
Last year, the company incurred the following costs:
Manufacturing Costs: Variable 260,000.00 Fixed 160,000.00 Selling and Administraitve: Variable 90,000.00 Fixed 180,000.00
- Calculate the Markup Percentage based on a cost basis of All variable and fixed costs. (provide your answer in % form to two decimal places, i.e. 37.428% = 37.43)
- Calculate the Markup Percentage based on a cost basis of Cost of Goods Sold. (provide your answer in % form to two decimal places, i.e. 37.428% = 37.43)
- Calculate the Markup Percentage based on a cost basis of Total variable costs. (provide your answer in % form to two decimal places, i.e. 37.428% = 37.43)
- Calculate the Markup Percentage based on a cost basis of Variable Manufacturing Costs. (provide your answer in % form to two decimal places, i.e. 37.428% = 37.43)
- ONEC's best harpoon costs $170 to manufacture and includes $95 of variable manufacturing costs and $75 of fixed overhead costs. Assuming the company uses a markup on variable manufacturing costs (previously calculated as one of the markup bases), what is the recommended sales price of the harpoon? (answer to two decimal places)
Show Formulas
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