Uses cost-plus pricing with mark-up

Assignment Help Financial Management

Reference no: EM13947134

The Estrada Company uses cost-plus pricing with a 0.30 mark-up. The company is currently selling 100,000 units at $12 per unit. Each unit has a variable cost of $3.30. In addition, the company incurs $183,300 in fixed costs annually. If demand falls to 86,600 units and the company wants to continue to earn a 0.30 return, what price should the company charge?

Reference no: EM13947134

Questions Cloud

Activity based pricing marks up the direct cost of goods : A company using activity based pricing marks up the direct cost of goods by 0.28 plus charges customers for indirect costs based on the activities utilized by the customer. Indirect costs are charged as follows: $7.60 per order placed; $2.30. per sep..

Calculate the amount of capital funding raised : Harper’s Dog Pens, Inc., with the help of its investment bank, recently issued $199.9 million of new debt. The offer price on the debt was $1,000 per bond and the underwriter’s spread was 5 percent of the gross proceeds. Calculate the amount of capit..

What is the capital structure weight of the firms preferred : Smith and Weston has 55,000 shares of common stock outstanding at a price of $31 a share. It also has 3,000 shares of preferred stock outstanding at a price of $62 a share. The firm has 8 percent, 12-year bonds outstanding with a total face value of ..

How much is the target cost per unit : 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..

Uses cost-plus pricing with mark-up : The Estrada Company uses cost-plus pricing with a 0.30 mark-up. The company is currently selling 100,000 units at $12 per unit. Each unit has a variable cost of $3.30. In addition, the company incurs $183,300 in fixed costs annually. If demand falls ..

What is the annual carrying costs of post card inventory : Cheeseburger and Taco Company purchases 18,669 boxes of cheese each year. It costs $15 to place and ship each order and $4.28 per year for each box held as inventory. The company is using Economic Order Quantity model in placing the orders. What is t..

Calculate the overhead cost per account for the money market : Baller Financial is a banking services company that offers many different types of checking accounts. The bank has recently adopted an activity-based costing system to assign costs to their various types of checking accounts. Calculate the overhead c..

Find the cash value of insurance : Mark has a $10,000 cash-value policy purchased 15 years ago when he was 25 years old. The policy will be paid at age 65. Find the cash value of insurance. Explain the other two options available to Mark.

Unit in variable costs-unit in fixed costs at a volume : A company has $6.90 per unit in variable costs and $4.60 per unit in fixed costs at a volume of 50,000 units. If the company marks up total cost by 0.50, what price should be charged if 58.000 units are expected to be sold?

User Account

All Pages