1. Given the following data (based on 15,000 units produced and sold per month): direct materials, P8; direct labor, P7; variable overhead, P2; and variable selling, P3. Fixed overhead costs totals P15,000 per month and fixed selling and administrative expenses total P30,000 per month. If the company uses the absorption approach to pricing and desires a 50% mark-up, the target selling price per unit would be a. P34.50 b. P33.50 c. P27.00 d. P23.00 e. None of these; answer is 2. Refer to no. 1. If the company uses the contribution approach to pricing and desires a 35% mark-up, the target selling price per unit should be a. P29.70 b. P22.95 c. P20.00 d. P34.50 e. None of these; answer is 3. Given the following data (based on 8,000 units produced and sold each month): direct materials, P6; direct lubor, P9; variable overhead, P2; fixed overhead, P8; variable selling, P3; and fixed selling and administrative expenses, P5. The company computes target selling prices by adding a mark-up of 75% by the contribution approach, or by adding a 40% mark-up by the absorption approach. Based on these datn, the "floor" and the "ceiling" between the company should operate in special pricing decisions are, respectively: a. P20 and P35 c. P33 and P35 d. P25 and P35 e. None of these; answer is b. P20 and P25
1. Given the following data (based on 15,000 units produced and sold per month): direct materials, P8; direct labor, P7; variable overhead, P2; and variable selling, P3. Fixed overhead costs totals P15,000 per month and fixed selling and administrative expenses total P30,000 per month. If the company uses the absorption approach to pricing and desires a 50% mark-up, the target selling price per unit would be a. P34.50 b. P33.50 c. P27.00 d. P23.00 e. None of these; answer is 2. Refer to no. 1. If the company uses the contribution approach to pricing and desires a 35% mark-up, the target selling price per unit should be a. P29.70 b. P22.95 c. P20.00 d. P34.50 e. None of these; answer is 3. Given the following data (based on 8,000 units produced and sold each month): direct materials, P6; direct lubor, P9; variable overhead, P2; fixed overhead, P8; variable selling, P3; and fixed selling and administrative expenses, P5. The company computes target selling prices by adding a mark-up of 75% by the contribution approach, or by adding a 40% mark-up by the absorption approach. Based on these datn, the "floor" and the "ceiling" between the company should operate in special pricing decisions are, respectively: a. P20 and P35 c. P33 and P35 d. P25 and P35 e. None of these; answer is b. P20 and P25
Chapter3: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 5EB: Cadre, Inc., sells a single product with a selling price of $120 and variable costs per unit of $90....
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Transcribed Image Text:1. Given the following data (based on 15,000 units produced and sold per month): direct materials, P8;
direct labor, P7; variable overhead, P2; and variable selling, P3. Fixed overhead costs totals P15,000
per month and fixed selling and administrative expenses total P30,000 per month. If the company uses
the absorption approach to pricing and desires a 50% mark-up, the target selling price per unit would be
d. P23.00
a. P34.50
b. Р33.50
c. P27.00
e. None of these; answer is
2. Refer to no. 1. If the company uses the contribution approach to pricing and desires a 35% mark-up,
the target selling price per unit should be
а. Р29.70
b. P22.95
c. P20.00
d. P34.50
e. None of these; answer is
3. Given the following data (based on 8,000 units produced and sold cach month): direct materials, P6;
direct lubor, P9; variable overhead, P2; fixed overhead, P8; variable selling, P3; and fixed selling and
administrative expenses, P5. The company computes target selling prices by adding a mark-up of 75%
by the contribution approach, or by adding a 40% mark-up by the absorption approach. Based on these
datn, the "floor" and the "ceiling" between the company should operate in special pricing decisions are,
respectively:
a. P20 and P35
b. P20 and P25
c. P33 and P35
d. P25 and P35
e. None of these; answer is
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