Power - To- Spare, Inc. makes a smartphone case that includes a battery that extends the operating life of an iPhone. The manufacturing costs per unit include $14 direct materials, $16 direct labor, and $8 manufacturing overhead. These costs are based on a production and sales volume of 4,000 units. Advertising costs amounted to $30,000. Research and development cost for the materials used in the phone cases amounted $36,000. Companywide administrative costs amounted to $42,000. Fashion design costs amounted to $28,000. Power - To - Spare's management team established the sales price at 150 percent of GAAP - defined product cost

Power - To- Spare, Inc. makes a smartphone case that includes a battery that extends the operating life of an iPhone. The manufacturing costs per unit include $14 direct materials, $16 direct labor, and $8 manufacturing overhead. These costs are based on a production and sales volume of 4,000 units. Advertising costs amounted to $30,000. Research and development cost for the materials used in the phone cases amounted $36,000. Companywide administrative costs amounted to $42,000. Fashion design costs amounted to $28,000. Power - To - Spare's management team established the sales price at 150 percent of GAAP - defined product cost

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter15: Lean Accounting And Productivity Measurement

Section: Chapter Questions

Problem 13E: Carsen Company produces handcrafted pottery that uses two inputs: materials and labor. During the...

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Power-To-Spare, Inc. makes a smartphone case that includes a battery that extends the operating life of an iPhone. The manufacturing costs per unit include $15 direct materials, $17 direct labor, and $8 manufacturing overhead. These costs are based on a production and sales volume of 4,000 units. Advertising costs amounted to $25,000. Research and development cost for the materials used in the phone cases amounted $30,000. Companywide administrative costs amounted to $45,000. Fashion design costs amounted to $20,000. Power-To-Spare’s management team established the sales price at 150 percent of GAAP-defined product cost. Required Determine the total amount of upstream costs. Determine the total amount of downstream cost. Determine the total amount of midstream cost. Determine the sales price per unit. Prepare a GAAP-based income statement.
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