User Account

All Pages

Calculate the target price of the oven under variable-cost

Assignment Help Managerial Accounting
Reference no: EM132602746

Zones is setting a target price on its new printer. Cost data for the printer writer at a budgeted volume of 3,000 units are as follows.

Per Unit Total

Direct Materials      $300

DL                        140

VMO                          60

Fixed MO                 $250,000

Variable sell & admin      40

Fixed selling & admin   120,000

Zones uses cost-plus pricing to provide a 40% ROI on its printer line. A total of $800,000 in assets has been committed to the production of the printers.

Instructions:

Question (a) Calculate the mark up % under the absorption-cost approach that will allow Zones to realize its desired ROI of 40%. Show your calculations to support your answer.

Question (b) Calculate the target price of the printer under absorption-cost pricing and show proof that the desired ROI is realized. Show your calculations to support your answer

Question (c) Calculate the mark up % under the variable-cost approach that will allow Zones to realize a desired ROI of 60%. Show your calculations to support your answer

Question (d) Calculate the target price of the oven under variable-cost pricing and show proof that the desired ROI (60%) is being realized. Show your calculations or support your answer.

Question (e) Since both absorption-cost pricing & variable-cost pricing produce the same target price and provide the same ROI, why do both methods exist? Isn't one method clearly better than the other? Hint: provide the benefits of each pricing alternative.

Reference no: EM132602746

Questions Cloud

Exchange theory with real life business situations : Differing from Fiedler's theory explain path goal leadership and leader member exchange theory with real life business situations and with references
Why is human resources in the health care industry : Why is human resources in the health care industry just as important as it is in other industries? Provide an example. 175 words. The response must be typed.
Level of engagement and quality of contribution : At the end of each unit, DB participation is assessed based on level of engagement and the quality of the contribution to the discussion.
How bcc strategize to avoid staffing shortages in the future : Behavioral Care Center (BCC) is a 50-bed inpatient, mental health hospital. Recently, BCC has had shortages of staff that at times have restricted the hospital'
Calculate the target price of the oven under variable-cost : Zones, Calculate the target price of the oven under variable-cost pricing and show proof that the desired ROI (60%) is being realized.
How you would approach the task and what you would propose : Imagine your organization is in survival mode as it tries to ride out the economic downfall. The organization has adopted a strategy of 20 percent reduction.
What is the quality of finished products : What is the age, condition and utilisation rate of these asset? Are they technologically up to date? What is the likely replacement cost? What is the quality
Examine the significant values of conducting an ethics audit : Examine the significant values of conducting an ethics audit in an organization. Select five (5) areas that you would focus on if you must conduct an ethics.
Find how does a sales forecast differ from a sales budget : How does a sales forecast differ from a sales budget?A sales forecast includes the company and the industry, while a sales budget includes only the industry.

Reviews

Write a Review

Managerial Accounting Questions & Answers

  Manage budgets and financial plans

Explain the budgeting process and its importance to a business, identifying the components of different budgets, forecast estimates for inclusion in the budgets.

  Prepare a retained earnings statement

Prepare a retained earnings statement for the year and Prepare a stockholders' equity section of given case.

  Prepare a master budget for the three-month period

Prepare a master budget for the three-month period.

  Construct the companys direct labor budget

Construct the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced.

  Evaluate the predetermined overhead rate

Evaluate the Predetermined Overhead Rate

  Determine the company''s bid

Determine the company's bid if activity-based costing is used and the bid is based upon full manufacturing cost plus 30 percent.

  Compute the pool rates for the different activities

Complete the schedule to compute the pool rates for the different activities.

  Prepare Company financial statements

Prepare Company financial statements

  Prepare an analysis of terracycles

This individual assignment is based on the TerraCycle Inc.

  Discuss the ethical issues

Discuss the ethical issues

  Political resources in emerging markets

Calculate the GDP in Income Approach  and Expenditure Approach

  Management accounting - ehsan electronics company

A new plant accountant suggested that the company may be able to assign support costs to products more accurately by using an activity based costing system that relies on a separate rate for each manufacturing activity that causes support costs.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd