answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
EleoNora [17]
2 years ago
10

Peachtree Doors, Inc. is in the process of setting a target price on its newly designed patio door. Cost data relating to the do

or at a budgeted volume of 5,000 units is as follows:
Per Unit Total
Direct materials $100
Direct labor 170
Variable
manufacturing
overhead 80
Fixed
manufacturing
overhead $750,000
Variable selling
and
administrative
expenses 25
Fixed selling
and
administrative
expenses 375,000
Peachtree uses cost-plus pricing that provides it with a 25% ROI on its patio door line. A total of $4,000,000 in assets is committed to production of the new door
Compute the following under the absorption-cost approach:
Markup percentage needed to provide desired ROI
Target price of the patio door.
Business
2 answers:
sattari [20]2 years ago
3 0

Answer:

a) 60%

b) $800

Explanation:

a)

                                                                                         Unit price

Direct materials                                                                $100

Direct labor                                                                       $170

Variable manufacturing overhead                                   $80

Fixed manufacturing overhead ($750,000 ÷ 5,000)      $150

Total manufacturing cost = $100 + $170 + $80 + $150 = $500

The mark-up percentage to provide a 25% (0.25) ROI:

Therefore, mark up percentage is given as:Mark -up=\frac{[ROI*(Total-assets/volume)]+[var.adm.exp+(fix.adm.exp/volume)]}{Total-manufacturing-cost} \\Mark-up=\frac{[0.25*(4000000/5000)]+[25+(375000/5000)]}{500} =\frac{200+100}{500} =0.6

mark up percentage = 60%

b) Target price = Total manufacturing cost + (Total manufacturing cost × mark up percentage) = $500 + ($500 × 0.6) = $800

worty [1.4K]2 years ago
3 0

Answer:

A. 60%

B. $800

Explanation:

Base on the scenario been described in the question, we have the following

a)

                                                                                         Unit price

Direct materials                                                                $100

Direct labor                                                                       $170

Variable manufacturing overhead                                   $80

Fixed manufacturing overhead ($750,000 ÷ 5,000)      $150

Cost of manufacturing= $100 + $170 + $80 + $150

Cost of manufacturing = $500

The mark-up percentage to given at 25% (0.25) ROI:

The mark up percentage is given as follows

Our mark up percentage = 60%

b) Target price = Total manufacturing cost + (Total manufacturing cost × mark up percentage) = $500 + ($500 × 0.6) Total target = $800 as our total target

You might be interested in
why is the quantity of education demand in private universities Much more responsive than salt is to change in price ?​
Nuetrik [128]

Answer:

Education demand is elastic as compared to salt demand which is highly inelastic.

Explanation:

Elasticity of demand is a measure of the responsiveness of the demand of a good or service relative to it's corresponding change in price. A demand curve can be used to determine the degree of elasticity. A demand curve is a graphical representation of how price varies with quantity of goods and services demanded. The quantity of goods demanded is plotted on the horizontal axis of the graph with the corresponding price plotted on the vertical axis of the graph. With the graph, the elasticity of demand can be calculated. The formula for determining elasticity for demand is;

ED=Q/P

where;

ED=elasticity of demand

Q=percentage change in quantity demanded, where

Q={(Q2-Q1)/Q1}×100

Q2=quantity demanded when price is P2

Q1=quantity demanded when price is P1

P=percentage change in price, where;

P={(P2-P1)/P1}×100

P2=final price

P1=initial price

The formula above can be used to determine the degree of elasticity of a good or service as shown;

If the price elasticity of demand is greater than 1, then the demand is elastic. Meaning the demand is very sensitive to changes in price. This usually happens on goods and services that are wants rather than needs. Wants are luxuries that most people can do without or can find cheaper alternatives while needs are goods that most people can't do without.

If the price elasticity of demand is less than 1, then the good or service is inelastic. Meaning the demand is not very sensitive to changes in price. This usually happens on goods and services that are needs. Needs are goods and services that most people cannot do without.

In our case, salt is a need that most people cannot do without, therefor inelastic. However, quantity of education in private universities is highly elastic since there are many alternatives like public universities that are much cheaper compared to private universities. So a change in price will affect the quantity of demand.

8 0
2 years ago
Alice's three children are driving her crazy. they are constantly squabbling, calling one another names, and generally tormentin
zhuklara [117]
The answer for this question is mutual interdependence (role differentiation) and a common goal. Mutual interdependence works for distinct goals of every participant. In other words, common goals for the entire group (entire group works for goals that are acknowledged by all members, not all members functioning for different, personal goals, but doing it together.)
7 0
2 years ago
The following are the current​ month's balances for selected accounts of Sandlin Marketing Company. Accounts Payable $ 10 comma
Ksenya-84 [330]

Answer:

$7700

Explanation:

Net Income = Revenue - Expenses

= 9000 - 1300 = $7700

7 0
2 years ago
Jacqui decides to open her own business and earns $50,000 in accounting profit the first year. When deciding to open her own bus
ohaa [14]

Answer: $4,000

Explanation: Economic profit can be defined as the difference between the total revenues generated from operations and cost incurred plus any opportunity cost taken.

Opportunity cost is the cost of next best alternative foregone, that is loss of profits that occurred due to choosing one alternative over other. In the given case loss of interest and loss of highest salary are opportunity cost for Jacqui .

Hence,

economic profit = revenues - (interest + salary)

                        =  $50,000 - ($1000 + $45,000)

                        = $4,000

7 0
2 years ago
Tile Depot, specializing in retail of construction materials, carries a popular flooring tile. The annual demand is estimated to
MissTica

Answer:

d.$500

Explanation:

Economic order quantity is the quantity at which business incur minimum cost. This is the level of order where the holding cost equals to the ordering cost of the business.

As per given data

Annual Demand = 5,000 cases

Ordering cost = $250

Carrying cost = $10

EOQ =  \sqrt{\frac{2 X S X D}{H} }

EOQ = \sqrt{\frac{2 X 250 X 5,000}{10} }

EOQ = 500

4 0
1 year ago
Read 2 more answers
Other questions:
  • During 2009, a particular country's inflation rate averaged 1.3% a day. This means that on average, prices went up by about 1.3%
    11·1 answer
  • What is the marginal benefit of the 4th fried peanut butter and banana sandwich?
    13·1 answer
  • Brittany needs to buy some term life insurance. She has evaluated two 20-year fixed premium policies. One policy will cost $30 a
    11·1 answer
  • Pitt Enterprises manufactures jeans. All materials are introduced at the beginning of the manufacturing process in the Cutting D
    11·1 answer
  • Carey, a single taxpayer, purchased a rental house in 2018, which he actively manages. During 2018, Carey had a loss of $14,000
    8·1 answer
  • To confirm available insurance discounts, call and ask them about
    5·2 answers
  • Wisdom Toys has budgeted sales and production over the next quarter as follows: Unit Sales Production September 43,000 44,400 Oc
    12·1 answer
  • An investor who was not as astute as he believed invested $264,500 into an account 12 years ago. Today, that account is worth $2
    12·1 answer
  • The Fime Corporation uses a standard costing system. The following data have been assembled for December: Actual direct labor-ho
    6·2 answers
  • Sedita Incorporated is working on its cash budget for July. The budgeted beginning cash balance is $46,000. Budgeted cash receip
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!