Question
Vanity Press (VP) Pty Ltd is a specialist print factory that manufactures three types of single order books: textbooks, novels and children's books. Each
Vanity Press (VP) Pty Ltd is a specialist print factory that manufactures three types of single order books: textbooks, novels and children's books. Each book is printed as a separate batch, to order, and only one print run per book is undertaken. The CEO is concerned that the current (simple) costing system may not be providing the information necessary to inform appropriate decisions about product mix and product pricing and so asks you to undertake a costing analysis of data for 2019. During the year, sales quantities and production costs were as follows: Sales Quantity Production costs ($) Paper Textbooks Novels 6,000 800 Kid's books Total books 1,500 8,300 $ 79,720 Book Covers 10,560 Overheads Total costs 150,445 $240,725 VP's pricing policy is to charge a mark-up of 40% on production costs, to a maximum price of $49.95.
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