Jay Company uses the total cost method 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% 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.Round the markup percentage to one decimal place and other intermediate computations and final answer to two decimal places.

Question

Jay Company uses the total cost method 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% 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.Round the markup percentage to one decimal place and other intermediate computations and final answer to two decimal places.

Quizplus · Accepted Answer

The Answer of Jay Company uses the total cost method 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% 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.Round the markup percentage to one decimal place and other intermediate computations and final answer to two decimal places.

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