If the order is accepted, what would be the impact on net income? a. b. c. d. 2.
ID: 2584223 • Letter: I
Question
If the order is accepted, what would be the impact on net income? a. b. c. d. 2. decrease of $750 decrease of $4,500 increase of $3,000 increase of $1,500 Magpie Corporation uses the total cost concept of product pricing. Below is cost information for the production and sale of 60,000 units of its sole product. Magpie desires a profit equal to a 25% rate of retu on invested assets of $700,000. Fixed factory overhead cost Fixed selling and administrative costs Variable direct materials cost per unit Variable direct labor cost per unit Variable factory overhead cost per unit Variable selling and administrative cost per unit $38,700 7,500 4.60 1.88 1.13 4.50 The cost per unit for the production and sale of the company's product is: a. $12.11 b. $12.88 c. $15 d. $13.50Explanation / Answer
calculation of the total cost and sale value of the product particulars cost per unit fixed factory overhead 0.65 fixed selling and administration 0.13 direct material 4.60 direct labor 1.88 variable factory overhead 1.13 variable selling and administration 4.50 total cost per unit 12.88 answer b 12.88 note fixed factory overhead per unit total cost / number of units 38700/60000 0.65 fixed selling and administration total cost / number of units 7500/60000 0.13 return on the investment shall not be considered in the cost per unit