Rugged footwear CC has designed and developed a new hiking sandal, Trudgers which is readyto be...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Rugged footwear CC has designed and developed a new hiking sandal, Trudgers which is readyto be introduced to the market. The projected standard costs for each pair of Trudgers are as Direct materials Direct labour Manufacturing overheads (20% variable) Total standard manufactured cost per pair follows: Advertising and promotions Salaries and other costs 0.25 hours 0.25 hours Standard rate ($) 120.00 160.00 The following additional information relating to Trudgers is available: a) The only variable non-manufacturing costs for Trudgers will be N$10 per pair for distribution. Annual fixed selling, administrative and general costs allocated to the product are expected to be: Standard cost ($) 1.3. N$ 400 000 b) As the firm manufactures a wide range of other products, managements expects that no more than 2 000 direct labour hours per year will be available for production of Trudgers. 160 000 560 000 c) An investment of $900 000 in new equipment and working capital will be required for the new line. The owners of Rugged footwear CC requires a return on investment (ROI) of 24% on new products d) Manufacturing overhead costs are allocated to products on the basis of direct labour hours. Non-manufacturing overheads are allocated on a unit basis. 120.00 30.00 40.00 190.00 REQUIRED: assume the firm uses absorption (total costs) approach to cost- plus pricing. 1.1. Calculate the mark-up that is needed to achieve 24% ROI. 1.2. Using the mark-up calculated above in (a), calculate the selling price for one pair of Trudger. Assuming that all of the sandals that can be produced can be sold at the price calculated in (b) above, prepare an income statement for Trudgers for the first year of production. TOTAL MARKS Marks 6 2 7 15 Rugged footwear CC has designed and developed a new hiking sandal, Trudgers which is readyto be introduced to the market. The projected standard costs for each pair of Trudgers are as Direct materials Direct labour Manufacturing overheads (20% variable) Total standard manufactured cost per pair follows: Advertising and promotions Salaries and other costs 0.25 hours 0.25 hours Standard rate ($) 120.00 160.00 The following additional information relating to Trudgers is available: a) The only variable non-manufacturing costs for Trudgers will be N$10 per pair for distribution. Annual fixed selling, administrative and general costs allocated to the product are expected to be: Standard cost ($) 1.3. N$ 400 000 b) As the firm manufactures a wide range of other products, managements expects that no more than 2 000 direct labour hours per year will be available for production of Trudgers. 160 000 560 000 c) An investment of $900 000 in new equipment and working capital will be required for the new line. The owners of Rugged footwear CC requires a return on investment (ROI) of 24% on new products d) Manufacturing overhead costs are allocated to products on the basis of direct labour hours. Non-manufacturing overheads are allocated on a unit basis. 120.00 30.00 40.00 190.00 REQUIRED: assume the firm uses absorption (total costs) approach to cost- plus pricing. 1.1. Calculate the mark-up that is needed to achieve 24% ROI. 1.2. Using the mark-up calculated above in (a), calculate the selling price for one pair of Trudger. Assuming that all of the sandals that can be produced can be sold at the price calculated in (b) above, prepare an income statement for Trudgers for the first year of production. TOTAL MARKS Marks 6 2 7 15
Expert Answer:
Answer rating: 100% (QA)
11 Markup needed to achieve 24 ROI 10 on total cost Explanation ii Ma... View the full answer
Related Book For
Statistics Unlocking the Power of Data
ISBN: 978-1118583104
1st edition
Authors: Robin H. Lock, Patti Frazer Lock, Kari Lock Morgan, Eric F. Lock, Dennis F. Lock
Posted Date:
Students also viewed these accounting questions
-
For the following transactions, state the accounts to be debited and credited. a) Firm buys inventory and pays immediately by cheque. b) Goods returned to the original supplier, A Rahman, due to them...
-
The data in All-Countries include information for all of the countries of the world, but some of the variables have missing data because values werent available for some countries. For example, there...
-
Panda Corporation paid $1,000,000 in cash for all of Sim Corporation's assets and liabilities in a statutory merger. The following table shows three possible cases for the merger: Required In each of...
-
Two kilograms of water, initially saturated liquid at 10 kPa, are heated to saturated vapor while the pressure is maintained constant. Determine the work and the heat transfer for the process, each...
-
A box contains three cards. One card is red on both sides, one card is green on both sides, and one card is red on one side and green on the other. One card is selected from the box at random, and...
-
Using the Internet, find the demographic profile for fans attending the LPGA (womens tour) versus the PGA (mens tour). Are there differences? Use this information to comment on the market selection...
-
An F-test with 5 degrees of freedom in the numerator and 7 degrees of freedom in the denominator produced a test statistic whose value was 5.31. The null and alternate hypotheses were H0: 1 = 2...
-
Patriot Company predicts that it will use 360,000 gallons of material during the year. The material is expected to cost $5 per gallon. Patriot anticipates that it will cost $72 to place each order....
-
According to Drury ( 2 0 2 1 ) , allowing managers and employees to participate in the setting of performance target has several advantages. Explain three advantages.Discuss how the difficulty in...
-
Ho Chee makes ice cream in two sequential processes: Mixing and Blending. Direct materials enter production at the beginning of each process. The following information is available regarding its...
-
2. The rack slides on a horizontal surface with the velocity and acceleration shown. The rack meshes with gear A, and gear A meshes with B. Gears A and B rotate about fixed centres. Determine (a) the...
-
Elizabeth and William just ordered their dream granite countertop from Coronados Inc., which had to purchase the slab, cut it, treat it, and install it. Throughout the process, Elizabeth and William...
-
State the knowledge, skills, and abilities (KSAs) for the mid-level management position for which you will be hiring. You must have a minimum of three for each area. Develop the job posting for the...
-
Tech Solutions is a consulting firm that uses job - order costing. Its direct materials consist of hardware and software it purchases and installs on behalf of its clients. The firm s direct labor...
-
In the realm of NoSQL databases, what are the distinctive characteristics and trade-offs between various data models, including document-oriented, key-value, columnar, and graph databases, regarding...
-
Organic Growth Company is testing a number of new agricultural seeds that it has recently harvested. To stimulate interest, it has decided to grant five of its largest customers the unconditional...
-
Find the volume of the solid by subtracting two volumes, the solid enclosed by the parabolic cylinders y = 1 - x2,y=x2-1 and the planes x + y + z=2, 2x + 3y-z +20=0.
-
Reduction in sales All of the above 29. Belt of an electric motor is broken, it needs a. Corrective maintenance b. Scheduled maintenance c. Preventive maintenance d. Timely maintenance. 30. The...
-
Refer to Table 11.13 in Exercise 11.87 that gives probabilities for fruit fly lifetimes. Table 11.13 (a) If we know a fruit fly died before the end of its second month, what is the probability it...
-
Exercise 9.17 on page 535, we use the information in StudentSurvey to fit a linear model to use Verbal SAT score to predict a students grade point average in college. The regression equation is (a)...
-
Data 2.7 on page 93 introduced the dataset Hollywood- Movies2011, which contains information on all the 136 movies that came out of Hollywood in 2011. Thirty-two of the Hollywood movies that year...
-
Identify a company that integrates goods and services similar to the LensCrafters example. Use the framework in Exhibit 5.1 to write a short case study about the company in a similar fashion as the...
-
Airbags are designed to protect passengers from frontal or near-frontal crashes. Their designs and performance have improved dramatically since their introduction in the 1980s. Exhibit 5.19 shows a...
-
Glen County manages a waste-to-energy facility that burns 2,000 tons of trash per day and generates over \($20\) million in electricity annually while costing state and local taxpayers \($24\)...
Study smarter with the SolutionInn App