Final answer:
The total cost per unit for Wesley Company is $148, and with a targeted 12.5% markup, the dollar markup per unit should be $18.50. The closest given option is C, $17.88, although it does not match exactly.
Step-by-step explanation:
The Wesley Company is using the total cost method to price their bowling balls, aiming for a 12.5% markup on total cost. We need to calculate the total costs first before we can determine the dollar markup per unit. Since the costs provided are for 10,000 bowling balls, the total variable cost per unit is the sum of direct materials, direct labor, overhead, and selling, general, and administrative expenses, which equals $64 + $13.90 + $24 + $3.90 = $105.80. The total variable cost for 10,000 units is $105.80 x 10,000 = $1,058,000.
The total fixed cost is the sum of fixed overhead and fixed selling, general, and administrative expenses, which equals $221,000 + $201,000 = $422,000. The total cost for 10,000 units is the sum of total variable cost and total fixed cost, which equals $1,058,000 + $422,000 = $1,480,000. The total cost per unit is $1,480,000 / 10,000 = $148. The target markup per unit is 12.5% of the total cost per unit, which is $148 x 0.125 = $18.50. Therefore, option C, $17.88, is the closest to the calculated dollar markup per unit, although there may be rounding discrepancies.