The Brandon Company prices its products using a 50% profit margin on the total cost of production
Question:
The Brandon Company prices its products using a 50% profit margin on the total cost of production to cover selling and administrative expenses and provide a reasonable return on investment.
Cost Per Unit
Direct materials $34
direct labor 20
Variable overall production load 27
Variable selling and administrative expenses 10
Fixed production overheads total $200,000 annually. Fixed selling and administrative expenses are $100,000 per year. The average number of units sold per year is 10,000.
Necessary
Estimate the NORMAL SALES PRICE using the functional cost approach to price these data and products. Note: The profit margin will be 50% of the selling price.
Management Accounting
ISBN: 978-0132570848
6th Canadian edition
Authors: Charles T. Horngren, Gary L. Sundem, William O. Stratton, Phillip Beaulieu