Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Williams Inc. produces a single product, a part used in the manufacture of automobile transmissions. Known for its quality and performance, the part is sold

image text in transcribed
Williams Inc. produces a single product, a part used in the manufacture of automobile transmissions. Known for its quality and performance, the part is sold to luxury auto manufacturers around the world. Because this is a quality product, Williams has some flexibility in pricing the part. The firm calculates the price using a variety of pricing methods and then chooses the final price based on that information and other strategic information. A summary of the key cost information follows. Williams expects to manufacture and sell 51,500 parts in the coming year. While the demand for Williams's part has been growing in the past 2 years, management is not only aware of the cyclical nature of the automobile industry, but also concerned about market share and profits during the industry current downturn Variable manufacturing Variable selling and administrative Facility-level fixed overhead Fixed selling and administrative Batch-level fixed overhead Total investment in product line Expected sales (units) Total Costs $ 4,677, ce 852,65e 2.342.875 672.495 357,000 22,347,00 51. See Required: 1. Determine the price for the part using a markup of 39% of full manufacturing cost 2. Determine the price for the part using a markup of 22% of full life-cycle cost 3. Determine the price for the part using a desired gross margin percentage to sales of 37% 4. Determine the price for the part using a desired life-cycle cost margin percentage to sales of 204 5 Determine the price for the part using a desired before-tex return on investment of 12 6. Determine the total contribution margin and total operating profit for each of the methods in requrements through 5 redite-cycle return on each of one Complete this question by entering your answers in the tabs below. Recured 4 Recure Rewired Required Resuired 2 of full manufacturing content Determine the price for the part using markup of 39 Rohelvour 4 decinal place whit

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

Using Financial Accounting Information The Alternative to Debits and Credits

Authors: Gary A. Porter, Curtis L. Norton

7th Edition

978-0-538-4527, 0-538-45274-9, 978-1133161646

More Books

Students also viewed these Accounting questions