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Kirk Comanufactures Mobile Cellular Equipment and Develops a Price for the the Product

question 40

Essay

Kirk Co.manufactures mobile cellular equipment and develops a price for the product by using a variable cost concept.Kirk incurs variable costs of $1,900,000 in the production of 100,000 units.Fixed costs total $50,000.The company employs $4,725,000 of assets and wishes to earn a profit equal to a 10% rate of return on assets.


Definitions:

Controlling

The process of monitoring, comparing, and correcting plan performance to ensure that organizational goals are achieved efficiently and effectively.

Product Cost

The total costs incurred to create a product, including direct labor, direct materials, and overhead expenses.

Automation

The use of technology to perform tasks with minimal human intervention, improving efficiency and consistency.

Direct Labor

The work contributed by employees who are directly involved in the manufacturing process of a product.

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