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 59,300 units of its sole product. Jell desires a profit equal to a 21% rate of return on invested assets of $621,000.00. Fixed factory overhead cost $39,645.00 Fixed selling and administrative costs $7,746.00 Variable direct materials cost per unit $4.71 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

DIRECT MATERIAL COST($4.71 * 59300) $279303 DIRECT LABOUR COST ($1.88 * 59300) $111484 VARIABLE FACTORY OVERHEAD ($1.33 * 59300) $78869 VARIABLE SELLING OVERHEAD ($4.50 * 59300) $266850 FIXED FACTORY OVERHEAD $39645 FIXED SELLING & ADMIN COST $7746 DESIRED PROFIT ($621000 * 21%) $130410 TOTAL SALES REVENUE $914307 NUMBER OF UNITS PRODUCED & SOLD 59300 SELLING PRICE PER UNIT ($914307 / 59300) $15.42

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