Maurice Tutor

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    Argosy University/ Phoniex University/
    Nov-2005 - Oct-2011

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    Phoniex University
    Oct-2001 - Nov-2016

Category > Management Posted 23 Jan 2018 My Price 8.00

Functional Cost Approach

Setting Selling Prices: Functional Cost Approach

Refer to PE 21-12. Assume that the company prices its products using a 30% markup on total manufacturing cost to cover selling and administrative expenses and to provide a reasonable return on investment. Using the following data and the functional cost approach to pricing products, estimate the normal selling price. Note: The markup will end up being 30% of the selling price.

PE 21-12

Setting Selling Prices: Contribution Approach

The company prices its products using a 40% markup on total variable cost to cover fixed costs and to provide a reasonable return on investment. Using the following data and the contribution approach to pricing products, estimate the normal selling price. Note: The markup will end up being 40% of the selling price.

Fixed manufacturing overhead totals $80,000 per year. Fixed selling and administrative expenses are $55,000 per year. The average number of units sold per year is 5,000.

 

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Maurice Tutor
(5)
Status NEW Posted 23 Jan 2018 07:01 PM My Price 8.00

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