What unit cost is relevant for setting minimum selling price

Assignment Help Accounting Basics
Reference no: EM131807993

Question - Arker Company has a single product called a Zet. The company normally produces and sells 80,000 Zets each year at a selling price of $40 per unit. The company's unit costs at this level of activity are given below:

Direct Materials $9.50

Direct Labor $10.00

Variable Manufacturing Overhead $2.80

Fixed Manufacturing Overhead $5.00 ($400,000 Total)

Variable Selling Expenses $1.70

Fixed Selling Expenses $4.50 ($360,000 Total)

Total Cost Per Unit $33.50

The company has 500 Zets on hand that were produced last month and have small blemishes. Due to the blemishes, it will be impossible to sell these units at the normal price. If the company wishes to sell them through regular distribution channels, what unit cost figure is relevant for setting a minimum selling price? Explain.

Reference no: EM131807993

Questions Cloud

Buying a pair of left-handed scissors : Suppose you have just 2 hours to determine how many people in your hometown would be interested in buying a pair of left-handed scissors
What is the companys net operating income : If the sales volumes in the East and West regions had been reversed, what would be the company's overall break even point in unit sales?
Draw conclusions regarding project health from earned value : Draw conclusions regarding project health from the Earned Value analysis. Write your findings in a 350- to 700-word memorandum.
Determined to continue in the university : He is determined to continue in the university, so he has decided to list all feasible alternatives for his housing. To help him, list five feasible alternative
What unit cost is relevant for setting minimum selling price : If the company wishes to sell them through regular distribution channels, what unit cost figure is relevant for setting a minimum selling price? Explain
Poor search for better alternatives : Describe a situation in which a poor alternative was selected because there was a poor search for better alternatives.
Maximize the difference between output and input : The three economic criteria for choosing the best alternative are maximize the difference between output and input
How the problem or issue impacts the organization : Be attentive to identifying how the problem or issue impacts the organization and its competitive position within the industry.
Discuss what is shoe market''s taxable income : The Walstore Shoe Market had $1871000 of shoe sales and its cost for these shoes was $685000

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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!

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