Fixed costs are $3,000, variable costs are $5 per unit. The company will manufacture 100 units...

Fixed costs are $3,000, variable costs are $5 per unit. The company will manufacture 100 units and chart a 50% markup. Using the cost-plus pricing method, what will the selling price be?

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Expert Solution

Answer is as follows:

Cost per Unit = Variable Cost p.u + ( Fixed Costs / No.of Units )

= $5 + ( $3000 / 100 units )

= $5 + $30

= $35

Selling Price Using Cost-Plus Pricing = Cost + Mark up on Cost

= $35 + 50% of $35

= $35+ $17.5

= $52.5

ekkarill92 answered 2 years ago

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