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Wilde Corporation budgeted the following costs for the production of its one and only product for the next fiscal year: Direct materials RM1,135,000 Direct labor
Wilde Corporation budgeted the following costs for the production of its one and only product for the next fiscal year: Direct materials RM1,135,000 Direct labor 800,000 Manufacturing overhead Variable 880,000 Fixed 650,000 Selling and administrative Variable 380,000 Fixed 510,000 Total costs RM4.355.000 Wilde has an annual target operating income of RM990,000. Required: (Show all calculations) a) What is the markup percentage for setting prices as a percentage of: i. Full cost of the product ii. Variable cost of the product iii. Variable manufacturing cost of the product iv. Manufacturing cost (5 marks) b) Discuss what are the consequences of misclassifying a non-value-added cost as a value-added cost? c) Most companies, especially the manufacturing sector, were negatively affected by the COVID-19 outbreak, as industrial production collapsed following the shutdown of factories. Discuss should these companies consider accepting special orders with short-term pricing strategies to survive in the industry
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