Question :
91. In contrast to the total product and variable cost concepts : 1233916
91. In contrast to the total product and variable cost concepts used in setting seller’s prices, the target cost approach assumes that: A. a markup is added to total costB. selling price is set by the marketplaceC. a markup is added to variable costD. a markup is added to product cost
92. McClelland Corporation uses the total cost concept of product pricing. Below is cost information for the production and sale of 60,000 units of its sole product. McClelland desires a profit equal to a 21% rate of return on invested assets of $600,000.
Fixed factory overhead cost
$37,500
Fixed selling and administrative costs
7,500
Variable direct materials cost per unit
4.50
Variable direct labor cost per unit
1.88
Variable factory overhead cost per unit
1.13
Variable selling and administrative cost per unit
4.50
The dollar amount of desired profit from the production and sale of the company’s product is: A. $126,000B. $67,200C. $73,500D. $96,000
93. McClelland Corporation uses the total cost concept of product pricing. Below is cost information for the production and sale of 60,000 units of its sole product. McClelland desires a profit equal to a 21% rate of return on invested assets of $600,000.
Fixed factory overhead cost
$37,500
Fixed selling and administrative costs
7,500
Variable direct materials cost per unit
4.50
Variable direct labor cost per unit
1.88
Variable factory overhead cost per unit
1.13
Variable selling and administrative cost per unit
4.50
The cost per unit for the production and sale of the company’s product is: A. $12B. $12.76C. $15D. $13.50
94. McClelland Corporation uses the total cost concept of product pricing. Below is cost information for the production and sale of 60,000 units of its sole product. McClelland desires a profit equal to a 21% rate of return on invested assets of $600,000.
Fixed factory overhead cost
$37,500
Fixed selling and administrative costs
7,500
Variable direct materials cost per unit
4.50
Variable direct labor cost per unit
1.88
Variable factory overhead cost per unit
1.13
Variable selling and administrative cost per unit
4.50
The markup percentage for the company’s product is: A. 21.0%B. 16.5%C. 15.7%D. 24.0%
95. McClelland Corporation uses the total cost concept of product pricing. Below is cost information for the production and sale of 60,000 units of its sole product. McClelland desires a profit equal to a 21% rate of return on invested assets of $600,000.
Fixed factory overhead cost
$37,500
Fixed selling and administrative costs
7,500
Variable direct materials cost per unit
4.50
Variable direct labor cost per unit
1.88
Variable factory overhead cost per unit
1.13
Variable selling and administrative cost per unit
4.50
The unit selling price for the company’s product is: A. $15.00B. $13.82C. $14.86D. $14.76
96. Mendoza Corporation uses the product cost concept of product pricing. Below is cost information for the production and sale of 45,000 units of its sole product. Mendoza desires a profit equal to a 10.8% rate of return on invested assets of $900,000.
Fixed factory overhead cost
$72,000
Fixed selling and administrative costs
45,000
Variable direct materials cost per unit
4.50
Variable direct labor cost per unit
7.65
Variable factory overhead cost per unit
2.25
Variable selling and administrative cost per unit
.90
The dollar amount of desired profit from the production and sale of the company’s product is: A. $105,840B. $225,000C. $ 97,200D. $220,500
97. Mendoza Corporation uses the product cost concept of product pricing. Below is cost information for the production and sale of 45,000 units of its sole product. Mendoza desires a profit equal to a 10.8% rate of return on invested assets of $900,000.
Fixed factory overhead cost
$72,000
Fixed selling and administrative costs
45,000
Variable direct materials cost per unit
4.50
Variable direct labor cost per unit
7.65
Variable factory overhead cost per unit
2.25
Variable selling and administrative cost per unit
.90
The cost per unit for the production of the company’s product is: A. $14.40B. $16.00C. $15.30D. $15.75
98. Mendoza Corporation uses the product cost concept of product pricing. Below is cost information for the production and sale of 45,000 units of its sole product. Mendoza desires a profit equal to a 10.8% rate of return on invested assets of $900,000.
Fixed factory overhead cost
$72,000
Fixed selling and administrative costs
45,000
Variable direct materials cost per unit
4.50
Variable direct labor cost per unit
7.65
Variable factory overhead cost per unit
2.25
Variable selling and administrative cost per unit
.90
The markup percentage for the company’s product is: A. 25.38%B. 10.98%C. 26.1%D. 18%
99. Mendoza Corporation uses the product cost concept of product pricing. Below is cost information for the production and sale of 45,000 units of its sole product. Mendoza desires a profit equal to a 10.8% rate of return on invested assets of $900,000.
Fixed factory overhead cost
$72,000
Fixed selling and administrative costs
45,000
Variable direct materials cost per unit
4.50
Variable direct labor cost per unit
7.65
Variable factory overhead cost per unit
2.25
Variable selling and administrative cost per unit
.90
The unit selling price for the company’s product is: A. $17.73B. $15.75C. $22.05D. $20.06
100. Elfrink Corporation uses the variable cost concept of product pricing. Below is cost information for the production and sale of 35,000 units of its sole product. Elfrink desires a profit equal to a 11.2% rate of return on invested assets of $350,000.
Fixed factory overhead cost
$105,000
Fixed selling and administrative costs
35,000
Variable direct materials cost per unit
4.34
Variable direct labor cost per unit
5.18
Variable factory overhead cost per unit
.98
Variable selling and administrative cost per unit
.70
The dollar amount of desired profit from the production and sale of the company’s product is: A. $89,600B. $39,200C. $70,000D. $84,000
