Jell Corporation uses the total cost concept of product pricing. Below is cost i

Question

Jell Corporation uses the total cost concept of product pricing. Below is cost information for the production and sale of 55,472 units of its sole product. Jell desires a profit equal to a 22% rate of return on invested assets of $579,356.00.

What is the dollar amount of desired profit from the production and sale of the company's product?

Select the correct answer.

Fixed factory overhead cost $35,232.00 Fixed selling and administrative costs $7,310.00 Variable direct materials cost per unit $4.25 Variable direct labor cost per unit $1.88 Variable factory overhead cost per unit $1.13 Variable selling and administrative cost per unit $4.50

Explanation / Answer

Solution:

The dollar amount of desired profit from the production and sale of the company's product is $127,458.32

Desired Profit = 22% of Invested Asset = 22% x $579,356 = $127,458.32

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