Answer:
Unitary selling price= $304.93
Explanation:
Giving the following information:
Unitary variable costs:
direct materials of $128
direct labor of $53
the variable overhead of $63.
Fixed costs:
The fixed overhead costs of $301,000
Fixed selling and administrative costs of $229,000
The company has a target profit of $189,800.
Units sold= 11,800 snowboards
First, we need to calculate the total contribution margin required:
Contribution margin= net profit + total fixed expense
Contribution margin= 189,000 + (301,000 + 229,000)
Contribution margin= $719,000
Now, we calculate the total variable expense:
Total variable cost= 11,800* (128 + 53 + 63)
TVC= 2,879,200
Finally, we calculate total sales and the unitary selling price:
Total sales= contribution margin + total variable cost
Total sales= 719,000 + 2,879,200= 3,598,200
Unitary selling price= 3,598,200/11,800= $304.93
