Question

Garcia Co. sells snowboards. Each snowboard requires direct materials of $113, direct labor of $43, and variable overhead of $58. The company expects fixed overhead costs of $661,000 and fixed selling and administrative costs of $130,000 for the next year. It expects to produce and sell 11,300 snowboards in the next year. What will be the selling price per unit if Garcia uses a markup of 15% of total cost

Answer 1

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Step-by-step explanation:

Total cost of 11,300 snow balls

Per unit total =

Direct material = $113 × 100

Direct labor = $43 × 262.79

Variable overhead = $58 × 194.82

Fixed overhead = $661,000

Total cost of 11,300 snow balls $2,700,000

Cost of 1 snow ball = Total cost of 11,300 snow balls / Total number of snowballs