KidCo has produced a new remote operated toy for children. It costs KidCo $45 to produce and package each toy. KidCo sells the game to various retailers (e.g., toy stores and discount stores), and sets the wholesale price to achieve a 65% markup "on cost". If these retailers, in turn, calculate their price (to consumer) based on a 40% markup "on the retail price" how much will a consumer pay for the toy? Show your work. (Hint: make sure that you understand the difference between "markup on cost" and "markup on retail.")

KidCo has produced a new remote operated toy for children. It costs KidCo $45 to produce and package each toy. KidCo sells the game to various retailers (e.g., toy stores and discount stores), and sets the wholesale price to achieve a 65% markup "on cost". If these retailers, in turn, calculate their price (to consumer) based on a 40% markup "on the retail price" how much will a consumer pay for the toy? Show your work. (Hint: make sure that you understand the difference between "markup on cost" and "markup on retail.")

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 15RE: GameDay sells recreational vehicles along with secure parking storage to customers. Game Day sells...

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A wholesaler purchases widgets for $8 per unit from the manufacturer and sells it to retailers who then sell to consumers. The wholesaler marks up by 20% on the retailer purchase price, while the retailers mark up by 25% on the wholesaler selling price. Here, the retail selling price to the consumer is: O $12.00 O $12.80 All the other 4 answers are correct. $12.50 O $13.33
GameDay sells recreational vehicles along with secure parking storage to customers. Game Day sells the FB7 model for 62,000, and this price includes one year of secure parking storage. GameDay also sell secure parking storage separately for 8,000 per year, and customers can purchase the FB7 model without secure parking storage for 60,000. If a customer purchases the FB7 model with secure parking storage, how should GameDay allocate the transaction price?
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Victor has been making basic mouse traps since 1898. This year, Victor expects a total contribution (TC) of $324,003.48 on sales of 217,452 units. Wholesalers distribute the mouse traps through independent hardware stores and home centers. The wholesalers use a selling price basis of 20%, earning them a CPU of $0.62 per mouse trap. Consumers buy the mouse traps for $4.99. (c) What is the wholesaler’s cost? $2.51 $2.46 $2.53 $2.48
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Patsy Smith is planning to sell her special knife for $15 per unit. She purchases units from alocal distributor for $6 each. She can return any unsold units for a full refund. Fixed costs forbooth rental, including lighting and security are $4500. Required a) Compute the breakeven point in units sold. b) Suppose the unit purchased is $5 instead of $6, the fixed cost increases by $500, butthe selling price is unchanged. Compute the new breakeven point in units sold. c) Using the above data, explain how cost behavior affects Patsy Smith’s decision-making?
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Susan Carrie is planning to sell her special pottery for $25 per unit. She purchases units from a local distributor for $11 each. She can return any unsold units for a full refund. Fixed costs for booth rental, including lighting and security is $8500. Required a) Compute the breakeven point in units sold. b) Suppose the unit purchased is $9 instead of $11, the fixed cost increases by $2000, but the selling price is unchanged. Compute the new breakeven point in units sold. c) Using the above data, explain how cost behaviour affects Patsy Smith's decision- making?
B) KTA sells a special type of health food at a price of P16 per pound. Last vegr purchases this food from its supplier at a cost of P12 per pound. The supplier informed KTA that its cost increases and that this product will now be priced at P14 a pound Over the years, KTA established a steady market and intends to pass the cost incregse along to its customers and also add a P1 per unit to the price for additional profit Fixed cost for the year are not expected to change and will remain at P34,000 Income tax rate is 32%. The net income after tax last year was P24,000. 2. If KTA can maintain sales volume at the same level as before with the new price and cost structure, how much profit can it expect for next year? C) A company had a loss of P3 per unit when sales were 40,000 units. When sales were 50,000. units, the company had a loss of P1.60 per unit. 3. Determine the BEP in units.
Marquette has an opportunity to sell its product through an online retailer. To begin selling through this online platform, they are required to ship 2,000 units to the retailers’ order fulfillment warehouse. The other condition of this offer is that they pay a one-time vendor marketing fee of $5,000. To get the units to the fulfillment warehouse by the deadline Marquette will need to pay for expedited shipping at a cost of $10 per unit. What is the minimum price Marquette should charge the retailer for this initial order of 2,000 units? (Show all supporting calculations). (NOTE: ignore taxes or other costs not specifically mentioned in the questions.)
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Susan Carrie is planning to sell her special pottery for $25 per unit. She purchases units froma local distributor for $11 each. She can return any unsold units for a full refund. Fixed costsfor booth rental, including lighting and security is $8500.Requireda) Compute the breakeven point in units sold. b) Suppose the unit purchased is $9 instead of $11, the fixed cost increases by $2000,but the selling price is unchanged. Compute the new breakeven point in units sold. c) Using the above data, explain how cost behaviour affects Patsy Smith’s decision-making?