Clicker Question Preparation Guide Ch 8 Clicker questions will be asked in class based on your completion of this preparation guide Example in class question What is the answer to Question 1 b You will not have time to complete this guide in class 1 Reynolds Corporation has the following cost and production information available for the 10 000 units they plan to produce this year Direct Materials 20 per unit Direct Labor 30 per unit Variable MOH 8 per unit Fixed MOH 130 000 Variable Selling Costs 12 per unit Fixed Selling Costs 70 000 The company wants to earn a 20 return on their investment of 1 440 000 Based on this information determine the following a Calculate the Total Cost per unit b Calculate the Desired ROI per unit c Calculate the Markup Percentage on Cost d Calculate the Target Selling Price 2 Johnson Co makes water ski equipment The average selling price is 900 per slalom ski They plan to make 1 000 skis The company would need to invest 1 500 000 in order to manufacture the water skis If they want a 20 return on their investment what is the Target Cost needed to meet their requirements 3 Clark Company has a pet division that sells dog leashes to customers for 25 00 The variable cost per unit is 6 and the fixed cost per unit is 4 Management wants the pet division to transfer 6 000 leashes to the veterinarian division at 11 per unit The company can save 50 per unit in variable packaging costs when transferring leashes internally a If Clark is operating with excess capacity what is the minimum transfer price the pet division would accept b If Clark is operating with no excess capacity what is the minimum transfer price the pet division would accept
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