Question
You are the manager in the production department of a shoe manufacturing company. The Company produces rubber shoes and it caters to 3 types of
You are the manager in the production department of a shoe manufacturing company. The Company produces rubber shoes and it caters to 3 types of market: students, working class and athletes. The company produce standard type of shoes for each market, Class C for students which is of average quality, Class B for working class which has higher quality than that of Class C and Class A for athletes which is of highest quality. Management policy is to set up selling price at 20% above cost for Class C, 50% above cost for Class B and 70% above cost for Class A. Management projected a total demand for the products as follows:
Class C 50,000units
Class B 30,000 units
Class A 20,000
The President ask you to prepare cost sheets for each of the class of products as a basis in setting the price.
Required:
- 1. Prepare cost sheets for each type of products. Calculate total cost and per unit cost for each type of product.
- 2. Determine the selling price for each type of product.
Step by Step Solution
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Step: 1
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Step: 2
Step: 3
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