During 2014, Welch Manufacturing Company incurred $105,600,000 of research and d
During 2014, Welch Manufacturing Company incurred $105,600,000 of research and development (R&D) costs to create a long-life battery to use in computers. In accordance with FASB standards, the entire R&D cost was recognized as an expense in 2014. Manufacturing costs (direct materials, direct labor, and overhead) are expected to be $266 per unit. Packaging, shipping, and sales commissions are expected to be $54 per unit. Welch expects to sell 2,400,000 batteries before new research renders the battery design technologically obsolete. During 2014, Welch made 432,000 batteries and sold 407,000 of them.
Determine the sales price assuming that Welch desires to earn a profit margin that is equal to 30 percent of the total cost of developingPrepare an income statement for 2014. Use the sales price developed in Requirement , making, and distributing the batteries
Prepare an income statement for 2014. Use the sales price developed in Requirement