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Q1) Manufacturing company makes 80,000 units of product A at total cost of $2.4 million.  Total fixed costs are $1.4 million.  If company raises production by 25% and uses a 40% mark-up price per unit will be:

 

A) $31.50

 

B) $30.80

 

C) $51.80

 

D) $37.10

 

Q2) Company using activity based pricing marks up direct cost of goods by 30% plus charges customers for indirect costs based on activities utilized by customer.  Indirect costs are charged as follows:  $8.00 per order placed; $4.00 per separate item ordered; $30.00 per return.  Customer places 10 orders with total direct cost of $3,000, orders 300 separate items, and makes 5 returns.  What will customer are charged?

 

a) $5,330

 

b) $3,000

 

c) $5,759

 

d) $3,900

Accounting Basics, Accounting

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