Jay Company uses the total cost concept of applying the cost-plus approach to product pricing.The costs and expenses of producing and selling 38,400 units of Product E are as follows:
Jay desires a profit equal to a 14% rate of return on invested assets of $640,000.
a Determine the amount of desired profit from the production and sale of Product E.
b Determine the total costs and the cost amount per unit for the production and sale of 38,400 units of Product E.
c Determine the markup percentage for Product E.
d Determine the selling price of Product E.

Question

Jay Company uses the total cost concept of applying the cost-plus approach to product pricing.The costs and expenses of producing and selling 38,400 units of Product E are as follows:
  Jay desires a profit equal to a 14% rate of return on invested assets of $640,000.
a Determine the amount of desired profit from the production and sale of Product E.
b Determine the total costs and the cost amount per unit for the production and sale of 38,400 units of Product E.
c Determine the markup percentage for Product E.
d Determine the selling price of Product E.

Quizplus · Accepted Answer

The Answer of Jay Company uses the total cost concept of applying the cost-plus approach to product pricing.The costs and expenses of producing and selling 38,400 units of Product E are as follows:
  Jay desires a profit equal to a 14% rate of return on invested assets of $640,000.
a Determine the amount of desired profit from the production and sale of Product E.
b Determine the total costs and the cost amount per unit for the production and sale of 38,400 units of Product E.
c Determine the markup percentage for Product E.
d Determine the selling price of Product E.

Jay Company Uses the Total Cost Concept of Applying the Cost-Plus