Question
Rundle Manufacturing Co. expects to make 31,300 chairs during the year 1 accounting period. The company made 5,200 chairs in January. Materials and labor costs
Rundle Manufacturing Co. expects to make 31,300 chairs during the year 1 accounting period. The company made 5,200 chairs in January. Materials and labor costs for January were $17,500 and $24,800, respectively. Rundle produced 1,600 chairs in February. Material and labor costs for February were $9,600 and $13,200, respectively. The company paid the $782,500 annual rental fee on its manufacturing facility on January 1, year 1. The rental fee is allocated based on the total estimated number of units to be produced during the year.
Required Assuming that Rundle desires to sell its chairs for cost plus 30 percent of cost, what price should be charged for the chairs produced in January and February?
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