Jay Company Uses the Total Cost Concept of Applying the Cost-Plus

question 151

Essay

Jay Company uses the total cost concept of applying the cost-plus approach to product pricing.The costs and expenses of producing and selling 38,400 units of Product E are as follows:
Jay desires a profit equal to a 14% rate of return on invested assets of $640,000.
a Determine the amount of desired profit from the production and sale of Product E.
b Determine the total costs and the cost amount per unit for the production and sale of 38,400 units of Product E.
c Determine the markup percentage for Product E.
d Determine the selling price of Product E.

---

Definitions:

Equilibrium

In economics, a state where market supply and demand balance each other, and as a result, prices become stable.

Coconuts

Tropical fruits or the hard-shelled seeds of the coconut palm, often used metaphorically in economics and game theory to represent tradable resources.

Civic Authorities

Government officials or bodies responsible for governing a city or town, and managing local services and regulations.

Long-run Supply Function

An economic concept that describes the total quantity of products that firms are willing to supply over a long period, taking into account the adjustments in production factors and technology.