Question
Product Cost Method of Product Pricing La Femme Accessories Inc. produces women's handbags. The cost of producing 800 handbags is as follows: Line Item Description
Product Cost Method of Product Pricing
La Femme Accessories Inc. produces women's handbags. The cost of producing 800 handbags is as follows:
| Line Item Description | Amount |
|---|---|
| Direct materials | $18,000 |
| Direct labor | 8,500 |
| Factory overhead | 5,500 |
| Total manufacturing cost | $32,000 |
The selling and administrative expenses are $17,000. The management desires a profit equal to 22% of invested assets of $250,000.
a. Determine the amount of desired profit from the production and sale of 800 handbags. 55,000
b. Determine the product cost per unit for the production of 800 handbags. 40
c. Determine the product cost markup percentage for handbags. ?
d. Determine the selling price of handbags.
| Line Item Description | Amount |
|---|---|
| Cost | 40 |
| Markup | ? |
| Selling price | ? |
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Financial Accounting Reporting, Analysis And Decision Making
Authors: Shirley Carlon
6th Edition
0730363279, 9780730363279
