Mount Rainier Manufacturing has determined the following per unit amounts: $10 1

Question

Mount Rainier Manufacturing has determined the following per unit amounts: $10 12 Fixed selling and administrative Variable overhead $20 Direct materials Direct labor Desired RO Fixed overhead Variable selling and administrative 5 15 25. What is the markup percentage using the absorption-cost approach? (3 points) 26. What is the markup percentage using the variable-cost approach? (3 points) 27. What is the markup percentage using the full-cost approach? (3 points) Tucomcari Manufacturing has budgeted the following unit sales: MonthUnits January 10,000 February8,000 March 9,000 11,000 Ma Finished goods on hand on December 31, totaled 1,000 units. It is the company's policy to maintair finished goods inventory at the end of each month equal to 10% of the next month's anticipated sales. 28, Prepare a production budget, by month, for the first quarter (Jan-Mar)(8 points)

Explanation / Answer

Target Selling Price = Direct Material + Direct Labor + Desired ROI + Fixed Overhead + Fixed Selling and administrative + Variable Overhead + Variable selling and administrative

...............................= $10 + $12 + $11 + $15 + $20 + $8 + $5

...............................= $81

25. Markup percentage using the absorption cost approach.

Manufacturing Cost = Direct Material + Direct Labor + Variable Overhead + Fixed Overhead

................................= $10 + $12 + $8 + $15

................................= $45

Gross Profit = Target Selling Price - Manufacturing Cost

....................= $81 - $45

....................= $36

Markup Percentage = Gross Profit / Manufacturing Cost

................................= $36 / $45

................................= 80%

26. Markup percentage using the variable cost approach.

Manufacturing Cost = Direct Material + Direct Labor + Variable Overhead + Variable selling and adminitrative

................................= $10 + $12 + $8 + $5

................................= $35

Gross Profit = Target Selling Price - Manufacturing Cost

....................= $81 - $35

....................= $46

Markup Percentage = Gross Profit / Manufacturing Cost

................................= $46 / $35

................................= 131.42%

27. Markup percentage using the full cost approach.

Manufacturing Cost = Direct Material + Direct Labor + Variable Overhead + Variable selling and adminitrative + Fixed Overhead + Fixed selling and administrative

................................= $10 + $12 + $8 + $5 + $15 + $20

................................= $70

Gross Profit = Target Selling Price - Manufacturing Cost

....................= $81 - $70

....................= $11

Markup Percentage = Gross Profit / Manufacturing Cost

................................= $11 / $70

................................= 15.71%

28. Prepare a production budget, by month, for the first quarter.

Production Budget January February March Quarter Unit Sales 10,000 8,000 9,000 27,000 Add: Desired Closing Inventory 800 900 1100 1100 Total Required Inventory 10,800 8,900 10,100 28,100 Less: Opening Inventory 1,000 800 900 1,000 Required units to produce 9,800 8,100 9,200 27,100

Related Questions

Navigate

• Browse (All)
• Browse M
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.