Understanding Unit Product Cost and Selling Price at Imperial Jewelers

How is the unit product cost calculated for the gold bracelet manufactured and sold by Imperial Jewelers?

The unit product cost for the gold bracelet manufactured and sold by Imperial Jewelers is $263.00, while the selling price of the bracelet is $405.00. The unit product cost refers to the total cost associated with producing and manufacturing a single unit of the product. It includes the direct costs of materials, labor, and manufacturing overheads.

Unit Product Cost Calculation:

The unit product cost for the gold bracelet at Imperial Jewelers is determined by adding up the direct materials cost, direct labor cost, and manufacturing overhead cost per unit. In this case, the total cost to produce one gold bracelet is $263.00. The breakdown of costs is as follows:
  • Direct Materials Cost: $XXX
  • Direct Labor Cost: $XXX
  • Manufacturing Overhead Cost: $XXX

Selling Price and Markup:

Imperial Jewelers sells the gold bracelet for $405.00, indicating a markup of $142.00 per unit. This markup covers the indirect costs of business operations and includes a profit margin.

Profit Calculation:

To calculate the profit on each gold bracelet sold by Imperial Jewelers, follow these steps:
  1. Selling Price: $405.00
  2. Unit Product Cost: $263.00
  3. Subtract the unit product cost from the selling price: $405.00 - $263.00 = $142.00
Therefore, the profit per gold bracelet sold by Imperial Jewelers is $142.00.
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