Considering a whole-business approach, what else should LPIC consider when pricing their products? Why?

Ice Cream Recipe

Cost

Unit of Measure

Batch Cost

40

Cups of cream

$ 0.20

/Cup

8.00

15

Cups of sugar

0.07

/Cup

1.05

20

Ounces of vanilla

0.60

/Ounce

12.00

25

Cups of toppings

$ 0.25

/Cup

6.25

Total Cost of Ingredients

27.30

Packaging

Cost

Unit of Measure

Batch Cost

40

pint containers

$ 0.15

/Container

$ 6.00

40

labels

$ 0.06

/Label

2.40

Total Cost of Packaging Materials

$ 8.40

Labor

Cost

Unit of Measure

Batch Cost

0.75

Hours of Labor

$ 37.00

/Hour

27.75

Total Cost of Labor

27.75

Overhead

Overhead is allocated based on direct labor hours (DLH).

Production in 2020 is expected to be

18,610

batches.

Estimated overhead costs for 2020 are

$ 229,950

Expected direct labor hours

12

$ 229,950

=

per DLH

18610

Outline LPIC's production costs by creating a sample Job Cost Sheet for an order of one batch of LPIC's ice cream.

Materials

Labor

Overhead

QTY

NAME

RATE

QTY

RATE

QTY

RATE

40

15

20

25

40

40

0.75

Total Materials

Total Labor

Total Overhead

Total Job Cost

While LPIC produces pints of ice cream out of the batches, they do not sell the pints individually. They sell all 40 pints produced with a batch as a unit to the NPS resellers. Those resellers sell the pints individually to the end consumers (vacationers with bucket hats and fanny packs). Based on the cost per batch, and the cost per pint, is it possible for LPIC to make a profit at their current per-batch price point? Support your answer with number data.

LPIC's Cost

LPIC's Selling Price

LPIC's Gross Profit

Per batch

$ 93.00

Per pint

Answer rating: 100% (QA)

ANSWER To determine if LPIC can make a profit at their current perbatch price point we need to calcu... View the full answer