Normal selling price
Not what you're looking for?
Burtis Company produces a number of products. In 2002, the selling price of Product A, whose sales are normally 10,000 units per year, was calculated as follows:
Unit Costs
Direct Material Costs.............................$ 4.00
Direct labor costs.................................. 7.00
Overhead costs..................................... 4.80
Selling and administrative costs................. 3.50
Full Cost.............................................19.30
Profit (10% of full cost)........................... 1.93
Selling price........................................$21.23
In 2003, the company estimates that direct material cost and direct labor cost will increase by 12 percent. It also estimates that overhead cost will increase by a total of $6,000 and that selling and administrative cost and sales volume will remain unchanged.
What is the normal selling price for Product A in 2003?
Purchase this Solution
Solution Summary
The solution explains how to calculate the normal selling price
Solution Preview
For 2003 we increase the costs as given to get the new price
Direct Material Costs.............................$ 4.48 (this will increase by 12% and so will be 4.00X1.12)
Direct labor ...
Purchase this Solution
Free BrainMass Quizzes
Accounting: Statement of Cash flows
This quiz tests your knowledge of the components of the statements of cash flows and the methods used to determine cash flows.
Balance Sheet
The Fundamental Classified Balance Sheet. What to know to make it easy.
Learning Lean
This quiz will help you understand the basic concepts of Lean.
Transformational Leadership
This quiz covers the topic of transformational leadership. Specifically, this quiz covers the theories proposed by James MacGregor Burns and Bernard Bass. Students familiar with transformational leadership should easily be able to answer the questions detailed below.
Organizational Leadership Quiz
This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.