Answer:
c.$4.20
Explanation:
Calculation to determine the markup per unit.
First step is to find the Total product costs.
Total product cost will be :
Direct materials $76,000 +Direct labor 130,000 +Factory overhead 56,500
= Total product costs $262,500
Second step is to find the Total cost per unit
Using this formula
Total cost per unit=Total product costs/Estimated units to be produced and sold
Let plug in the formula
Total cost per unit= ($262,500 ÷ 15,000 units) Total product costs=$17.50
The Third step is to find the Desired profit
Using this formula
Desired profit=Total assets ×Desired rate of return
Let plug in the formula
Desired profit= ($200,000 × 10%)
Desired profit=$20,000
The fourth step is to find the markup percentage
Using this formula
Markup percentage =[(Desired profit+Selling and administrative expenses)/Total product costs ]
Let plug in the formula
Markup percentage = [($20,000 + $43,000) ÷ $262,500]
Markup percentage=$63,000/$262,500
Markup percentage=24%
The last step is to find the Markup per unit
Using this formula
Markup per unit =Total product costs/Markup percentage
Let plug in the formula
Markup per unit=($17.50 × 24%)
Markup per unit= $4.20
Therefore the Markup per unit will be $4.20
