Ascertain the full cost-plus based price

Assignment Help Cost Accounting

Reference no: EM13920496

Markup has begun to produce a new product, Product X, for which the following cost estimates have been made.

Direct materials	$27
Direct labour: 4 hrs at $5 per hour	$20
Variable production overheads: machining, ½ hr at $6 per hour	$3
	$50

Production fixed overheads are budgeted at $300,000 per month and because of the shortage of available machining capacity, the company will be restricted to 10,000 hours of machine time per month. The absorption rate will be a direct labour rate, however, and budgeted direct labour hours are 25,000 per month. It is estimated that the company could obtain a minimum contribution of $10 per machine hour on producing items other than product X.

The direct cost estimates are not certain as to material usage rates and direct labour productivity, and it is recognised that the estimates of direct materials and direct labour costs may be subject to an error of r 15%. Machine time estimates are similarly subject to an error of r 10%.

The company wishes to make a profit of 20% on full production cost from product X.

Required

Ascertain the full cost-plus based price.

Reference no: EM13920496

Questions Cloud

Marketline database and wall street journal : Complete a perceptual map that includes a minimum of 10 competitors from that same industry. Explain why you placed each competitor on its particular spot on the map.

Balance sheet showed a balance : During the year, Able Co. purchased $39,600 worth of supplies, at the end of the year, the balance sheet showed a balance of $1,760 in the supplies account.

Potential computer ethics issues : Write a two to three (2-3) page paper in which you: Describe two (2) potential computer ethics issues associated with holding computers hostage.

Prepare a mock concept paper : Write your mock Concept Paper using the Concept Paper template found in the Dissertation Center. Follow the template guidelines for each section.

Ascertain the full cost-plus based price : The direct cost estimates are not certain as to material usage rates and direct labour productivity. Ascertain the full cost-plus based price.

Insured personal casualty losses : In 2015, Wally had the following insured personal casualty losses (arising from one casualty). Wally also had $42,000 AGI for the year before considering the casualty.

Contributing to theory-independent-mediating : Examine the literature in your topic area and identify five articles published within the past five years that investigate mediating, moderating, or independent variables in an attempt to contribute to theory in the topic area. Write a paper in wh..

Swot analysis of the organization and offering : Select a new product or service that will be launched by either an existing organization or one you will create. This product or service will serve as the basis for the Marketing Plan you will write throughout the course.

Individual rights that united states grants criminal suspect : Choose two (2) individual rights that the United States grants criminal suspects, such as search and seizure, right to counsel, etc., and analyze the country's perspective on each right. Provide support for the analysis.

User Account

All Pages