Answered

IDNLearn.com provides a user-friendly platform for finding and sharing accurate answers. Our platform provides trustworthy answers to help you make informed decisions quickly and easily.

GoSnow sells snowboards. Each snowboard requires direct materials of $110, direct labor of $35, and variable overhead of $45. The company expects fixed overhead costs of $265,000 and fixed selling and administrative costs of $211,000 for the next year. The company has a target profit of $200,000. It expects to produce and sell 10,000 snowboards in the next year. Compute the selling price using the variable cost method.

Sagot :

Ayokenny2001idn

Answer:

See below

Explanation:

Given the above information,

We need to calculate first the total contribution margin.

Contribution margin = Net profit + Total fixed expense

= $200,000 + ($265,000 + $211,000)

= $200,000 + $476,000

= $676,000

Now, we will calculate the total variable expense

Total variable cost

= 10,000 × ($110 + $35 + $45)

= 10,000 × $190

= $1,900,000

Finally, compute the total sales and the unitary cost

Total sales = Contribution margin + Total variable cost

= $676,000 + $1,900,000

= $2,576,000

Unitary selling price = $2,576,000/10,000 = $257.6

We appreciate your participation in this forum. Keep exploring, asking questions, and sharing your insights with the community. Together, we can find the best solutions. Trust IDNLearn.com for all your queries. We appreciate your visit and hope to assist you again soon.