p10-8

Project Description:

the production of a new product required venetian manufacturing co. to lease additional plant facilities. based on studies, the following data have been made available: estimated annual sales– 24,000 units..
amount per unit estimated costs: materials . . . . . . . . . . ...... . . . . . . . . . . . ...... . . . . . . . . . $ 96,000 $ 4.00 direct labor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,400 0.60 factory overhead . . . . . . ...... . . . . . . . . . . . . . ...... . . . . . 24,000 1.00 administrative expense. ................ . . . . . . ...... . . . . . 28,800 1.20 total. . . . . . . . . . . . . . ..... . . . . . . . . . . . ...... . . . . . . . . . $ 163,200 $ 6.80
selling expenses are expected to be 5% of sales, and net income is to amount to $ 2.00 per unit.
required:
1. calculate the selling price per unit. ( hint: let “ x” equal the selling price and express selling expense as a percentage of “ x.”)
2. prepare an absorption costing income statement for the year ended december 31, 2013.
3. calculate the break- even point expressed in dollars and in units, assuming that administrative expense and factory overhead are all fixed but other costs are fully variable.
Skills Required:
Project Stats:

Price Type: Negotiable

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