QUESTION 4 (S) 20 Direct material cost: ($) 20 Direct labor cost: 10 Variable production overhead 10 Variable nonproduction overhead 5 They are estimated the fixed production overhead; fixed nonproduction overhead of 5'mil 0.9 and 5'mil 0.1 respectively. There is no opening inventory; budgeted production and sales volume is 120,000 units. The following anticipated data are for the next year of operations: Per unit Requirements: 1. Compute product cost under absorption costing and unit selling price if the markup percentage is 50% of product cost. 2. If the company want to achieve target net income of $'mil 3.6, how many percentages of margin on variable cost should be applied

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter4: Job Order Costing
Section: Chapter Questions
Problem 3PB: Event Forms expects $120,000 in overhead during the next year. It doesn't know whether it should...
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QUESTION 4
(S) 20
Direct material cost: ($) 20
Direct labor cost: 10
The following anticipated data are for the next year of operations: Per unit
Variable production overhead 10
Variable nonproduction overhead 5
They are estimated the fixed production overhead; fixed nonproduction overhead of 5'mil 0.9 and 5'mil 0.1 respectively.
There is no opening inventory; budgeted production and sales volume is 120,000 units.
Requirements:
1. Compute product cost under absorption costing and unit selling price if the markup percentage is 50% of product cost.
2. If the company want to achieve target net income of $'mil 3.6, how many percentages of margin on variable cost should
be applied
Transcribed Image Text:QUESTION 4 (S) 20 Direct material cost: ($) 20 Direct labor cost: 10 The following anticipated data are for the next year of operations: Per unit Variable production overhead 10 Variable nonproduction overhead 5 They are estimated the fixed production overhead; fixed nonproduction overhead of 5'mil 0.9 and 5'mil 0.1 respectively. There is no opening inventory; budgeted production and sales volume is 120,000 units. Requirements: 1. Compute product cost under absorption costing and unit selling price if the markup percentage is 50% of product cost. 2. If the company want to achieve target net income of $'mil 3.6, how many percentages of margin on variable cost should be applied
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