Hummingbird Company uses the product cost concept of applying the cost-plus approach to product pricing.The costs and expenses of producing 25,000 units of Product K are as follows:
Hummingbird desires a profit equal to a 5% rate of return on invested assets of $642,500.
a Determine the amount of desired profit from the production and sale of Product K.
b Determine the total manufacturing costs and the cost amount per unit for the production of 25,000 units of Product K.
c Determine the markup percentage for Product K.
d Determine the selling price of Product K.

Question

Hummingbird Company uses the product cost concept of applying the cost-plus approach to product pricing.The costs and expenses of producing 25,000 units of Product K are as follows:
  Hummingbird desires a profit equal to a 5% rate of return on invested assets of $642,500.
a Determine the amount of desired profit from the production and sale of Product K.
b Determine the total manufacturing costs and the cost amount per unit for the production of 25,000 units of Product K.
c Determine the markup percentage for Product K.
d Determine the selling price of Product K.

Quizplus · Accepted Answer

The Answer of Hummingbird Company uses the product cost concept of applying the cost-plus approach to product pricing.The costs and expenses of producing 25,000 units of Product K are as follows:
  Hummingbird desires a profit equal to a 5% rate of return on invested assets of $642,500.
a Determine the amount of desired profit from the production and sale of Product K.
b Determine the total manufacturing costs and the cost amount per unit for the production of 25,000 units of Product K.
c Determine the markup percentage for Product K.
d Determine the selling price of Product K.

Hummingbird Company Uses the Product Cost Concept of Applying the Cost-Plus