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.
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Materials per package RM100
Direct labour per hour RM30
Manufacturing overhead per package RM30
Administrative and distribution expenses RM25
Each package takes about 10 minutes to complete packing. The Management Accountant
estimates that 40% of the manufacturing overheads and administrative and distribution
expenses are variable. The company expects a profit margin of 22%.
Required:
Calculate the price of each package using variable cost-plus method.Ans: 162.82
But i get 30×40%=12
25×40%=10100+30+12+10=152
How to get 162.82???
This (as you have typed it) has nothing to do with target costing.
Materials $100
Labour 10/60 x $30 = $5
Manufacturing overheads 40% x $30 = $12
Admin. 40% x $25 = $10Total: $127.00
Selling price = 100/78 x $127.00 = $162.82
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