Kaspar Corporation makes a commercial-grade cooking griddle. The following information is available for Kaspar Corporation's anticipated annual volume of 25,600 units
| Per Unit | Total | |
| Direct materials | $18 | |
| Direct labor | $5 | |
| Variable manufacturing overhead | $16 | |
| Fixed manufacturing overhead | $358,400 | |
| Variable selling and administrative expenses | $3 | |
| Fixed selling and administrative expenses | $51,200 |
The company uses a 43% markup percentage on total cost.
(a)
Compute the total cost per unit. Total cost per unit = $_______
Compute the target selling price. Target selling price = $_______
a)Total cost per unit= direct material+direct labour+Var mfg
overhead+var sG&A+ fixed mfg overhead+fixed sG&A
fixed mfg overhead per unit=fixed mfg overhead cost/no of
units
=358400/25600=14
fixed SG&A per unit=Fixed seling and admin exp/no of
units
=51200/25600=2
Total cost per unit=18+5+16+14+3+2=58
2)target selling prices=cost per unit+(markup*cost per
unit)
=58+(43%*58)=82.94