Question

Mussatto Corporation produces snowboards. The following per unit cost information is available: direct materials $10, direct labor $4, variable manufacturing overhead $6, fixed manufacturing overhead $13, variable selling and administrative expenses $5, and fixed selling and administrative expenses $13. Using a 38% markup percentage on total per unit cost, compute the target selling price. (Round answer to 2 decimal places, e.g. 10.50.)

Answer 1

the target selling price is $70.38

Step-by-step explanation:

The target selling price is obtained by establishing the Total unit cost then adding a profit mark-up of 38%.

Unit Cost will include BOTH manufacturing and non-manufacturing costs to establish the target selling price as follows:

Calculation of Total unit Cost and target selling price.

direct materials $10.00

direct labor $4.00

variable manufacturing overhead $6.00

fixed manufacturing overhead $13.00

variable selling and administrative expenses $5.00

fixed selling and administrative expenses $13.00

total cost $51.00

add Profit mark -up at 38% $19.38

target selling price $70.38