Answered

Connect with knowledgeable individuals and get your questions answered on IDNLearn.com. Find the information you need quickly and easily with our comprehensive and accurate Q&A platform.

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

Thank you for joining our conversation. Don't hesitate to return anytime to find answers to your questions. Let's continue sharing knowledge and experiences! IDNLearn.com has the answers you need. Thank you for visiting, and we look forward to helping you again soon.