Answer:
1. Cost per unit = 860,500/45000 units = $19.12
2. Mark up = 12% * 800,000 = $96,000/45000 units = $2.13
mark up = 2.13/19.12 = 11.14%
3. Therefore selling price per unit = $19.12+$2.13 = $21.25
Explanation:
Variable direct materials cost per unit............................ 5.50
Variable direct labor cost per unit.................................... 7.65
Variable factory overhead cost per unit .........................2.25
Variable selling and administrative cost per unit........... .90
TOTAL VARIABLE COST PER UNIT..................................16.3
TOTAL VARIABLE COST = $16.3*45000 units = $733,500
Fixed factory overhead cost $82,000
Fixed selling and administrative costs 45,000
TOTAL COST = $ 860,500
1. Cost per unit = 860,500/45000 units = $19.12
2. Mark up = 12% * 800,000 = $96,000/45000 units = $2.13
mark up = 2.13/19.12 = 11.14%
3. Therefore selling price per unit = $19.12+$2.13 = $21.25
