Please use this link to open the finiancial statement and answer the question. A
ID: 2721140 • Letter: P
Question
Please use this link to open the finiancial statement and answer the question. Also show workings please. http://new.capsim.com/modules/compxm/student/pdfReportGDNA.cfm?Round=5&simid=GXM78994_012&AnnRep=0&attrSec=1460E92C56FE6F40E78B5833EC315C94
In order to sell a product at a profit, the product must be priced higher than the total cost to build the unit, plus period expenses and overhead. At the end of last year, Digby had their product Daze aimed at the Americas Budget segment. Use the Globe's Product Analysis to find Daze's production cost (labor + materials) in the Americas region. Exclude possible inventory carrying costs. Assume period expenses and overhead total 50% of their production cost. What is the minimum price the product could have been sold for in the American region to cover the unit cost, period expenses, and overhead?
$5.69
$17.07
$23.00
$11.38
Explanation / Answer
The production cost as per globe report Daze product sold in Americas budget segment
America region Daze Per unit cost($) material cost (a) 6.90 labor cost (b) 5.54 production cost (a+b) 12.44 period and overhead expense (50% of production cost) 6.22 Total unit cost 18.66