How to calculate Cost Plus and absorpion osting from the dat

How to calculate Cost Plus and absorpion osting from the data below.

a. Cost Plus sell price (I+ markup percentage) cost b. Absorption Costing . List all the steps in your calculation. Here is what we know: Investment cost is $1,000,000 ROI requirement 30% Variable Cost $400/unit Fixed manufacturing cost $300/unit Units to sell: 5,000 first year Sales & Admin cost $70,000/year . · .

Solution

1)cost plus priceing

2)ABSORBTION COSTING

NOTE

SELLING PRICE = TOTAL COST+DESIRED PROFIT

DESIRED PROFIT=INVESTMENT*30%

=1000000*30%

=300000

SP PER UNIT= 3570000+300000/5000 UNITS

=774$ PER UNIT

particulars	working	amount$
veriable cost	5000*400	2000000
fixed manufacturing cost	5000*300	1500000
selling&adminstration over head		70000
total cost/year		3570000
number units to sell		5000
cost/unit		714
ADD: MARKUP		100%
SELLING PRICE PER UNIT		1428