Question

Mussatto Corporation produces snowboards. The following per unit cost information is available: direct materials $15, direct labor $9, variable manufacturing overhead $10, fixed manufacturing overhead $12, variable selling and administrative expenses $5, and fixed selling and administrative expenses $8. Using a 40% markup percentage on total per unit cost, compute the target selling price. (Round answer to 2 decimal places, e.g. 10.50.) Target selling price $enter the target selling price in dollars rounded to 2 decimal places.

Answer 1

The target selling price for Mussatto Corporation's snowboards, calculated with a 40% markup on the total per unit cost of $59, is $82.60.

Step-by-step explanation:

To compute the target selling price for Mussatto Corporation's snowboards using a 40% markup on the total per unit cost, we first need to sum up all the per unit costs. The total per unit cost includes direct materials, direct labor, variable manufacturing overhead, fixed manufacturing overhead, variable selling and administrative expenses, and fixed selling and administrative expenses.

The total per-unit cost is calculated as follows:

• Direct materials: $15
• Direct labor: $9
• Variable manufacturing overhead: $10
• Fixed manufacturing overhead: $12
• Variable selling and administrative expenses: $5
• Fixed selling and administrative expenses: $8

By adding up all these costs, the total per unit cost amounts to $59 ($15 + $9 + $10 + $12 + $5 + $8). To determine the target selling price, we apply the 40% markup.

Target selling price = Total per unit cost + (Total per unit cost × Markup percentage)
Target selling price = $59 + ($59 × 0.40)
Target selling price = $59 + $23.60
Target selling price = $82.60

Therefore, the target selling price for Mussatto Corporation's snowboards would be $82.60, rounded to two decimal places.

Answer 2

Selling price= $54.6

Step-by-step explanation:

Giving the following information:

The following per unit cost information is available: direct materials $15, direct labor $9, variable manufacturing overhead $10, fixed manufacturing overhead $12, variable selling and administrative expenses $5, and fixed selling and administrative expenses $8. Using a 40% markup percentage on total per-unit cost, compute the target selling price.

We will use variable costing to calculate the unitary cost:

Total unitary cost= direct material + direct labor + variable overhead + variable selling and administrative

Total unitary cost= 15 + 9 + 10 + 5= $39

Selling price= 39*1.40= $54.6