Question

Lafleur Corporation needs to set a target price for its newly designed product, M14-M16. The following data relate to it:

		Per Unit		Total
Direct materials		$12
Direct labour		17
Variable manufacturing overhead		10
Fixed manufacturing overhead				$2,970,000
Variable selling and administrative expenses		4
Fixed selling and administrative expenses				2,376,000

These costs are based on a budgeted volume of 297,000 units produced and sold each year. Lafleur uses cost-plus pricing to set its target selling price. The markup on the total unit cost is 40%.

Calculate the total variable cost per unit, total fixed cost per unit, and total cost per unit for M14-M16.

Total variable cost per unit		$
Total fixed costs per unit		$
Total cost per unit		$

eTextbook and Media

  

  

Question Part Score

--/3

Calculate the desired markup per unit for M14-M16. (Round answer to 2 decimal places, e.g. 15.25.)

Markup per unit

$

eTextbook and Media

  

  

Question Part Score

--/2

Calculate the target selling price for M14-M16. (Round answer to 2 decimal places, e.g. 15.25.)

Target selling price

$

eTextbook and Media

  

  

Question Part Score

--/2

Assuming that 237,600 M14-M16s are produced during the year, calculate the variable cost per unit, fixed cost per unit, and total cost per unit. (Round answers to 2 decimal places, e.g. 15.25.)

Total variable cost per unit		$
Total fixed costs per unit		$
Total cost per unit		$

eTextbook and Media

Answer 1