In the previous period,Alex company produced 13,750 units. Total costs and unit costs incurred were as follows:
Question:
In the previous period,Alex company produced 13,750 units. Total costs and unit costs incurred were as follows:
Statements | Total Costs | Unit Costs |
Variable production costs | ||
Direct materials and parts | 188,500 | 13.73 |
Direct labor | 60,000 | 4.36 |
Variable manufacturing overhead | 44,250 | 3.21 |
Total variable production costs | 292,750 | 21.30 |
Fixed manufacturing overhead | 154,875 | 11.26 |
Total production costs | 447,625 | 32.56 |
Selling, general, and administrative expenses | ||
Selling expenses | 73,750 | 5.36 |
General expenses | 36,875 | 2.68 |
Administrative expenses | 22,125 | 1.61 |
Total selling, general, and administrative expenses | 132,750 | 9.65 |
Total costs and expenses | 580,375 | 42.20 |
No changes in unit costs are expected this period. Desired profit for the period is $110,625. The company uses assets totalling $921,875 in producing a 14% return on those assets.
Instructions: Compute the price of Alex using the following methods:
1. Gross margin pricing method?
2. Return on assets pricing method?
Cost Accounting A Managerial Emphasis
ISBN: 978-0136126638
13th Edition
Authors: Charles T. Horngren, Srikant M.Dater, George Foster, Madhav