A project requires an initial investment of $60,000 and has a project profitability index of 0.329. The present value of the fut
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Answer:
Selling Price per unit = $287.5 per unit
Explanation:
Provided quantum of sales = 10,000 units
Cost statement for 10,000 units
Direct material = $100 10,000 = $1,000,000
Direct Labor = $30 10,000 = $300,000
Variable Overhead = $45 10,000 = $450,000
Fixed Overhead Costs = $635,000
Fixed Selling and administrative Cost = $115,000
Total = $2,500,000
Add: Profit mark up 15% = $375,000
Total Selling Value = $2,875,000
Selling Price per unit = $2,875,000/10,000 = $287.5 per unit