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Please help me solve this accounting problem!

Please help me solve this accounting problem!-example-1
User XjeaxaxX
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a) The total cost per unit is $900.

b) The markup per unit is $225.

c) The selling price is $1,125.

Variable Cost Per Unit

Direct materials $490

Direct labor $60

Overhead $140

Selling, general, and admin. $10

Variable cost per unit $700

Production units = 20,000

Total variable costs = $14,000,000 ($700 x 20,000)

Fixed Costs:

Overhead $2,500,000

Selling, general, and admin. $1,500,000

Total fixed costs = $4,000,000

Total production costs = $18,000,000

Total cost per unit = $900

Markup percentage = 25%

Mark up per unit = $225 ($900 x 25%)

Selling price per unit = $1,125 ($900 x 1.25)

Thus, the company can produce the laptop and sell it at $1,125, which is below Apple's $1,199 selling price.

User Diwas Poudel
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