Answer:
$12.88
Step-by-step explanation:
given information
units sold 60,000
desired profit = 25% x $700,000 = $175,000
fixed factory overhead = $38,700
fixed S&A = $7,500
direct materials per unit = $4.60
direct labor per unit = $1.88
variable overhead per unit = $1.13
variable S&A per unit = $4.50
the cost per unit:
- direct materials per unit = $4.60
- direct labor per unit = $1.88
- variable overhead per unit = $1.13
- variable S&A per unit = $4.50
- fixed factory overhead = $38,700 / 60,000 = $0.645
- fixed S&A = $7,500 / 60,000 = $0.125
- total cost per unit = $12.88
the desired profit = $2.92, so the selling price to achieve the desired profit should = $15.80