Recently began production of new product flat panel displays

Assignment Help Financial Accounting

Reference no: EM131261548

Display Labs Inc recently began production of a new product, flat panel displays, which required the investment of $1,800,000 in assets. The costs of producing and selling 9000 units of flat panel displays are as follows: Variable cost per unit, direct materials $90, direct labor $20, Factory overhead $40, Selling and adminstration expenses $35 totalling $185. The fixed costs are Factory overhead $360,000, selling and administration exenses $180,000. Display Labs is currently considering establishing a selling price for flat panel displays. The president of display labs has decided to use cost-plus approach to product pricing and has indicated the displays must earn a 20% rate of return on invested assets. 1. Determine the product cost concept for cost amount per unit, markup percentages, selling price of flat panel displays. 2. using the total cost concept determine the cost per unit, markup percentage rounded to two decimal places and selling price rounded to nearest whole dollae. 3. using variable cost concept for the cost amount per unit, the markup percentage rounded two decimal places and selling price of flat panels 4. assune that as of august 1,2012 5000 units of flat panel displays has been produced and sold during the current year.analysis of domestic market indicates that 4000 additional units are expected to b sold during the remainder of the year at normal product price determined under product cost concept. On Aug 3, 2012 Display labs revieve an offer from Video systems for 1500 units if flat panel displays for $225 each. Video systems will market the units in canada under its own name brand and no selling and adminstative costs wer associated with thesale will be incurred by display labs. The additional business is not expected to affect the domestic sales of flatpanel displays and additional units could be produced using existing capacity.

Reference no: EM131261548

Questions Cloud

Direct labor standards-the labor rate variance : Pikus Corporation makes a product that has the following direct labor standards: In January the company's budgeted production was 3,400 units, but the actual production was 3,500 units. The company used 640 direct labor-hours to produce this output. ..

What was the variable overhead rate variance for the month : Millonzi Corporation has a standard cost system in which it applies manufacturing overhead to products on the basis of standard machine-hours (MHs). The company has provided the following data for the most recent month: What was the variable overhead..

Makes product with the standard costs : Hurren Corporation makes a product with the following standard costs: The company reported the following results concerning this product in June. The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases..

Applying the theory of constraints : Applying the Theory of Constraints... "Explain why your organization does not have unlimited resources (space, inventory, product line, etc). Explain why there are always limits to what your organization can do.

Recently began production of new product flat panel displays : Display Labs Inc recently began production of a new product, flat panel displays, which required the investment of $1,800,000 in assets. The costs of producing and selling 9000 units of flat panel displays are as follows: Variable cost per unit, dire..

The labor rate variance for february : Fabiano Corporation makes a product whose direct labor standards are 0.5 hours per unit and $23.00 per hour. In February the company produced 3,300 units using 1,640 direct labor-hours. The actual direct labor cost was $38,540. The labor rate varianc..

Contract to build network for customer for total sales : Asahi Technology has a contract to build a network for a customer for a total sales price of euro 10 million. The network will take an estimated three years to build, and total building costs are estimate to be euro 6 million. At the end of Year 3, t..

Calculate the company basic and diluted eps : Forest Company reported net income of $4.8 million for the fiscal year ended 30 June 2009 and had a weighted average of 1,000,000 common shares outstanding. At the beginning of the fiscal year, the company has outstanding 60,000 options with an exerc..

User Account

All Pages