Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Sales price computation. In June, Steinhardt, Inc., sold 50 air conditioners for $200 each. Costs included materials costs of $50 per unit, direct labor costs

Sales price computation. In June, Steinhardt, Inc., sold 50 air conditioners for $200 each. Costs included materials costs of $50 per unit, direct labor costs of $30 per unit, and factory overhead at 100% of direct labor cost.. Interest expense on an 8% bank loan was equivalent to $2 per unit. Federal Income tax at a 30% rate was equivalent to $15 per unit. Effective July 1, materials costs decroased 5% per unit and direct labor costs Increased 20% per unit. Also effective July 1, the interest rate on the bank loan increased from 8% per annum to 9% per annum. Assume in requiremonts (1) and (2) that the expected July sales volume is 50 units, the same as for June. Required: (1) The sales price per unit that will produce the same ratio of gross profit, assuming no change in the rate of factory overhead in relation to direct labor costs. (2) The sales prico per unit that will produce the samo ratio of gross profit, assuming that $10 of the June factory overhead consists of fixed costs and that the variable factory overhead ratio to direct labor costs is unchanged from Juno

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

Step: 3

blur-text-image

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

Microsoft Dynamics Ax 2012 R3 Financial Management

Authors: Mohamed Aamer

1st Edition

1784390984, 978-1784390983

More Books

Students also viewed these Accounting questions