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    See attached file for a full problem description. Concepts covered include total cost, variable cost, and product cost.

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    Please see the attached file.

    4) INSTRUCTIONS: Solve the following problems and record the answers in the Answers column.
    0. The opportunity cost of investing $100,000 (in fixed assets) that is currently invested in U.S. Treasury Bills earning 6.5% is


    0. ____
    1-4. Watkins Co. has the following costs for Product M:

    Variable costs:
    Direct materials $ 6.00 per unit
    Direct labor 2.50
    Factory overhead 1.50
    Selling and administrative expenses  2.00
    Total $12.00 per unit
    Fixed costs:
    Factory overhead $79,600
    Selling and administrative expenses 40,000

    Watkins desires a profit equal to a 20% rate of return on assets. $800,000 of assets are devoted to producing Product M, and 50,000 units are expected to be produced and sold.

    1. Calculate the markup percentage, using the total cost concept 22.23%
    1. ____
    2. Calculate the markup percentage, using the variable cost concept 46.6%
    2. ____
    3. Calculate the markup percentage, using the product cost concept 51.75%
    3. ____
    4. The selling price, using the variable cost concept, is $ 17.60
    4. ____
    5-6. Massey Printing Co. makes Products S, T, and U. All three products are processed through a common ...

    Solution Summary

    The attached word document contains calculations of markup percent using total cost, variable cost, and product cost.