Q1) Manufacturing company makes 80,000 units of product A at total cost of $2.4 million. Total fixed costs are $1.4 million. If company raises production by 25% and uses a 40% mark-up price per unit will be:
A) $31.50
B) $30.80
C) $51.80
D) $37.10
Q2) Company using activity based pricing marks up direct cost of goods by 30% plus charges customers for indirect costs based on activities utilized by customer. Indirect costs are charged as follows: $8.00 per order placed; $4.00 per separate item ordered; $30.00 per return. Customer places 10 orders with total direct cost of $3,000, orders 300 separate items, and makes 5 returns. What will customer are charged?
a) $5,330
b) $3,000
c) $5,759
d) $3,900