Please complete Module 20 exercises for Accounting - 4 total (short and sweet!) :)

Question 1 Product Pricing: Single Product Presented is the 2009 contribution income statement of Colgate Products. COLGATE PRODUCTS Contribution Income Statement For Year Ended December 31, 2009 Sales (18,000 units) $2,160,000 Less variable costs Cost of goods sold $720,000 Selling and administrative 198,000 (918,000) Contribution margin 1,242,000 Less fixed costs Manufacturing overhead 770,000 Selling and administrative 340,000 (1,110,000) Net income $132,000 During the coming year, Colgate expects an increase in variable manufacturing costs of $6 per unit and in fixed manufacturing costs of $72,000. (a) If sales for 2010 remain at 18,000 units, what price should Colgate charge to obtain the same profit as last year? $Answer (b) Management believes that sales can be increased to 24,000 units if the selling price is lowered to $105. What would be the excepted profit (or loss) as a result of this action? Use a negative sign with your answer, if appropriate. Answer (c) After considering the expected increases in costs, what sales volume is needed to earn a profit of $132,000 with a unit selling price of $105? Answer units Question 2 Cost-Based Pricing and Markups with Variable Costs Compu Services provides computerized inventory consulting. The office and computer expenses are $600,000 annually and are not assigned to specific jobs. The consulting hours available for the year total 20,000, and the average consulting hour has $30 of variable costs. (a) If the company desires a profit of $160,000, what should it charge per hour? $Answer (b) What is the markup on variable costs if the desired profit is $240,000? Answer % (c) If the desired profit is $60,000, what is the markup on variable costs to cover (1) unassigned costs and (2) desired profit? Markup to cover unassigned costs Answer % Markup to cover desired profits Answer % Question 3 Target Costing Oregon Equipment Company wants to develop a new log-splitting machine for rural homeowners. Market research has determined that the company could sell 6,000 log-splitting machines per year at a retail price of $700 each. An independent catalog company would handle sales for an annual fee of $2,000 plus $50 per unit sold. The cost of the raw materials required to produce the log-splitting machines amounts to $80 per unit. If company management desires a return equal to 10 percent of the final selling price, what is the target conversion and administrative cost per unit? Round answer to the nearest cent. Answer Question 4 Computing Markups The predicted 2009 costs for Osaka Motors are as follows: Manufacturing Costs Selling and Administrative Costs Variable $100,000 Variable $300,000 Fixed 220,000 Fixed 200,000 Average total assets for 2009 are predicted to be $6,000,000. (a) If management desires a 13 percent rate of return on total assets, what are the markup percentages for total variable costs and for total manufacturing costs? (Round your answers to the nearest whole percent.) Markup on variable costs Answer % Markup on manufacturing costs Answer % (b) If the company desires a 7 percent rate of return on total assets, what is the markup percentage on total manufacturing costs for (1) unassigned costs and (2) desired profit? (Round your answers to the nearest whole percent.) Markup to cover unassigned costs Answer % Markup to cover desired profit Answer %