Question

In order to sell a product at a profit the product must be priced higher than the total of what it costs you to build the unit, plus period expenses, and plus overhead. At the end of last year the broad cost leader Baldwin had an Elite product Buzz. Use the Inquirer's Production Analysis to find Buzz's production cost, (labor+materials). Exclude possible inventory carrying costs. Assume period expenses and overhead total 1/2 of their production cost. What is the minimum price the product could have been sold for to cover the unit cost, period expenses, and overhead? Select: 1 $32.17 $10.72 $35.00 $21.45

Answer 1

Answer:

1 $32.17

Explanation:

The computation of the minimum price the product should sold is shown below:

Min price = Production cost + period cost + overhead cost

= $21.45 + $10.725

= $32.175

The period cost and the overhead cost is the half of the total production cost and we considered the same

We simply added the production cost, period cost and the overhead cost so that the minimum price could come