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Zanzabum
3 years ago
15

A manufacturer reports the following information on its product. Direct materials cost $ 43.00 per unit Direct labor cost $ 11.3

0 per unit Variable overhead cost $ 5.30 per unit Fixed overhead cost $ 1.30 per unit Target markup 30 % Compute the target selling price per unit under absorption costing
Business
1 answer:
RideAnS [48]3 years ago
5 0

Answer:

Selling price= $79.17

Explanation:

Giving the following information:

Direct materials cost $43

Direct labor cost $11.30

Variable overhead cost $ 5.30

Fixed overhead cost $ 1.30

Target markup 30 %

<u>The absorption costing method includes all costs related to production, both fixed and variable.</u> The unit product cost is calculated using direct material, direct labor, and total unitary manufacturing overhead.

Unit product cost= 43 + 11.3 + 5.3 + 1.3= $60.9

<u>Now, the selling price:</u>

Selling price= 60.9*1.3

Selling price= $79.17

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