A manufacturing firm manufactures product AA. The firm has a policy of adding a 20% markup to
Question:
A manufacturing firm manufactures product AA. The firm has a policy of adding a 20% markup to full costs and currently has excess capacity. The following information pertains to the company's normal operations per month at the level of output of 20,000 units:
(this question has two requirements: the price and determining the full cost)
Machine-hours 6000 hours
Direct manufacturing labor-hours 10,000 hours
Direct materials per unit $60
Direct manufacturing labor per hour $12
Variable manufacturing overhead costs $320,000
Fixed manufacturing overhead costs $1,200,000
Non-manufacturing costs $1,600,000
For long-run pricing of the product AA, the price will most likely be used by the firm is Answer
Fundamental Managerial Accounting Concepts
ISBN: 978-0078025655
7th edition
Authors: Thomas Edmonds, Christopher Edmonds, Bor-Yi Tsay, Philip Old