Canton Company Produces and Sells Toasters Required:
1)Compute the Budgeted Selling Price Per Unit Assuming Canton

question 63

Essay

Canton Company produces and sells toasters.The following unit cost information assumes a production and sales volume of 15,000 units: $\begin{array}{|l|r|}\hline \text { Direct materials } & \$ 9 \\\hline \text { Direct labor } & 6 \\\hline \text { Variable overhead } & 2 \\\hline \text { Fixed overhead } & 3 \\\hline \text { Variable selling and administrative costs } & 1 \\\hline \text { Fixed selling and administrative costs } & 4 \\\hline\end{array}$ Required:
1)Compute the budgeted selling price per unit assuming Canton uses a cost-plus pricing strategy and a markup equal to 75% of production cost.
2)Compute the firm's total fixed costs.
3)Compute the firm's contribution margin per unit given the budgeted selling price you computed in Requirement 1.
4)Compute the firm's breakeven point in units and dollars,using the selling price you calculated in part 1.
5)Using the unit contribution margin,compute the firm's estimated profit if 15,000 units are sold.

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