The Following Data Pertain to Tannebaum Corporation's Residential Humidifier

question 25

Essay

The following data pertain to Tannebaum Corporation's residential humidifier:

To achieve a target price of $450 per humidifier, the markup percentage on total unit cost is 12%.
Required:
A. Calculate the fixed selling and administrative cost allocated to each humidifier.
B. For each of the following bases, determine the appropriate percentage markup on cost that will result in a target price of $450 per humidifier: (1) variable manufacturing cost, (2) absorption manufacturing cost, and (3) total variable cost. (Round percentages to the nearest one-hundredth of a percent.)

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Definitions:

Manufacturing Overhead

All indirect costs associated with the production process, excluding direct materials and direct labor costs.

Job Cost Sheet

A job cost sheet is a document that records the costs associated with a specific job or batch, tracking materials, labor, and overhead.

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead costs to individual units of production, based on a particular activity base.

Machine-hours

A measure of the time that machines are operating, often used as a basis for allocating manufacturing overhead costs.