Uses cost-plus pricing, The Estrada Company uses cost-plus

Uses cost-plus pricing

Assignment Help Financial Management

Reference no: EM131078145

The Estrada Company uses cost-plus pricing with a 0.48 mark-up. The company is currently selling 100,000 units. Each unit has a variable cost of $4.80. In addition, the company incurs $180,900 in fixed costs annually. If demand falls to 85,800 units and the company wants to continue to earn a 0.48 return, what price should the company charge?

Reference no: EM131078145

Questions Cloud

Suppose the current risk-free rate of return : Suppose the current risk-free rate of return is 3.3 percent and the expected market risk premium is 8.5 percent. Using this information, estimate the cost of retained earnings for a company with a beta coefficient equal to 0.8?

Find the estimated total costs for production level : Total costs were 74,300 when 29,000 units were produced and $93,500 when 37,000 units were produced. Use the high low method to find the estimated total costs for a production level of 32000 units

Determine the cost using target costing methodology : A new product is being designed by an engineering team at Golem Security. Several managers and employees from the cost accounting department and the marketing department are also on the team to evaluate the product and determine the cost using a targ..

Units are expected to be sold : A company has $6.10 per unit in variable costs and $3.80 per unit in fixed costs at a volume of 50,000 units. If the company marks up total cost by 0.47, what price should be charged if 67,000 units are expected to be sold?

Uses cost-plus pricing : The Estrada Company uses cost-plus pricing with a 0.48 mark-up. The company is currently selling 100,000 units. Each unit has a variable cost of $4.80. In addition, the company incurs $180,900 in fixed costs annually. If demand falls to 85,800 units ..

What is pre-tax cost of debt-effective annual return : Avicorp has $14.2 million debt issue outstanding, with a 6.1% coupon rate. The debt has semi-annual coupons, the next coupon is due in six months, and the debt matures in five years. It is currently priced at 93% of par value. What is Avicorp’s pre-t..

What is the project operating cash flow for the first year : The financial staff of Cairn Communications has identified the following information for the first year of the roll-out of its new proposed service: Projected sales $20 million Operating costs (not including depreciation) 8 million Depreciation 4 mil..

What is the price if markup : Sosa Company has $39 per unit in variable costs and $1,900,000 per year in fixed costs. Demand is estimated to be 138,000 units annually. What is the price if a markup of 35% on total cost is used to determine the price?

Disadvantage of re-working the keyboards : The Manassas Company has 55 obsolete keyboards that are carried in inventory at a cost of $9,600. If these keyboards are upgraded at a cost of $7,800, they could be sold for $19,700. Alternatively, the keyboards could be sold "as is" for $7,200. What..

User Account

All Pages