Rose Company manufactures a complex alarm system Rose starte

Rose Company manufactures a complex alarm system. Rose started month of April with zero work-in-process inventory. In month of April, Rose started working on 30,000 units. Rose was able to finish and transfer 26,000 units to warehouse. The remaining units in factory were 80% completed. During April, Rose spent $1,022,000 for manufacturing costs (materials, labor, and factory overhead).

1 Compute manufacturing cost per unit of an alarm system.

2 Assume Rose’s selling price per unit is “Cost+160% of Cost”. The “160% of Cost” helps company to cover other business expenses (i.e., selling and administrative) and make profit. What should be the selling price per unit of the alarm system? Carry up to two decimal points.

Solution

1 Equivalent units = 26000+(4000*80%)= 29200 Manufacturing cost per unit = 1022000/29200= $35 2 Selling price per unit = 35*160%= $56