Business, 30.03.2020 20:47 Janznznz4012

Goshawks Co. produces an automotive product and incurs total manufacturing costs of $2,600,000 in the production of 80,000 units. The company desires to earn a profit equal to a 12% rate of return on assets of $960,000. Total selling and administrative expenses are $105,000.
Required:
a. Calculate markup percentage, using the product cost concept. Rpund to one decimal place. b. Compute the price of the automotive product. Round your answer to two decimal places.

Answers: 2

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Answer from: youngbeauty17

Explanation:

Computation A:

Product Cost Markup = Desire to Earn Profit + Total Selling

Desired to Earn profit = $960,000 × 12%

Desired to Earn profit = $115,200

Product Cost Markup = Desire to Earn Profit + Total Selling

Product Cost Markup = $115200 + $105000

Product Cost Markup = $220,200

Percentage Markup = Product Cost Markup / Incur Total Manufacturing Cost

Percentage Markup = $220200 / $2600000

Percentage Markup = 8.5%

Computation B:

Per Unit Cost = $2,600,000 / 80000

Per Unit Cost = $32.5

Price of Product = $32.5 + ($32.5 × 8.5%)

Price of Product = $35.26

Answer from: igtguith

a. Calculate markup percentage, using the product cost concept. Rpund to one decimal place.

To calculate the markup percentage using the product cost concept. We will use the formula,

Markup Percentage = (Desired Profit + Total Selling and Administrative Expenses ) / Total Manufacturing Costs

Given in the Question is,

Desired Profit = 12% rate of return on assets of $960,000

Total Selling and Administrative Expenses = $105,000

Total Manufacturing Costs = $2,600,000

Substituting in the formula,

= ($960,000 x 12% + $105,000) / $2,600,000

= ($115,200 + $105,000) / $2,600,000

= $220,200 / $2,600,000

= 0.0846 = 8.46% is the markup percentage.

b. Compute the price of the automotive product. Round your answer to two decimal places.

Manufacturing Cost amount per unit $32.50

($2,600,000 / 80,000 units)

Markup ($32.50 x 8.46%) 2.75

Selling price $35.25

The price of the automotive product is $35.25.

Answer from: Quest

i might look it up later.

Answer from: Quest

answer; only identify and interpret trends in the marketplace;

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Goshawks Co. produces an automotive product and incurs total manufacturing costs of $2,600,000 in th...

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