This homework for Managerail Accounting

1. A company wants to sell a product at the price of BD15. It wants a profit of 20% on cost price. Calculate the maximum cost of production the company can have. Suppose it wants a markup of 30% on selling price how much should be the cost of manufacturing. (Marking scheme: Computation = 8, correctness of answer = 2; Total: 10 Marks) 2. A company is planning a new product. It has conducted a market survey and it found that the company can sell 8000 units at a price of BD18. The company want to have a 30 percent profit on the cost price. Further it did an internal analysis of the lifetime costs of the product. It was estimated that the design and development costs would be BD47,500, Manufacturing Cost = 6.72 BD per unit, and End of life costs BD18,720. The company estimates that if an additional BD 16740 is spend on using advanced production technology unit cost of manufacturing can be reduced. Using the above information you are required to: (a) Find the target cost of the product? (Marking scheme: Computation = 8, correctness of answer = 2; Total: 10 Marks) (b) Find the original lifecycle cost per unit and evaluate if the product worth making on that basis? (Marking scheme: Computation = 8, correctness of answer = 2; Total: 10 Marks) (c) Taking in to account the additional amount to be spent on design, what is the maximum manufacturing cost per unit that could be tolerated if the company is to earn its required mark-up? (Marking scheme: Computation = 8, correctness of answer = 2; Total: 10 Marks)