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.