product cost concept of product pricing 425991

Aug 29, 2021 | Uncategorized

Product Cost Concept of Product Pricing

Mademoiselle Company produces women’s handbags. The cost of producing 1,240 handbags is as follows:

Direct materials $14,800
Direct labor 7,000
Factory overhead 5,500
Total manufacturing cost $27,300

The selling and administrative expenses are $27,600. The management desires a profit equal to 17% of invested assets of $505,000.

If required, round your answers to nearest whole number.

a. Determine the amount of desired profit from the production and sale of 1,240 handbags.
$

b. Determine the product cost per unit for the production of 1,240 handbags.
$

c. Determine the product costmarkup percentage for handbags.
%

d. Determine the selling price of handbags. Round your answers to nearest whole value.

Cost amount per unit: $
Markup:
Selling price: $

Hide Feedback Partially Correct Check My Work Feedback a. Multiply the desired profit percentage by the desired amount (invested assets).

b. Divide the total manufacturing costs by the number of units produced.

c. Divide the desired profit plus the selling and administrative expenses by the total manufacturing cost.

d. Add cost (b) and mark up [(c) x (b)].