Calculate the normal selling price for the top of the line Hammer Time collectors set given...

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Question

Calculate the normal selling price for the top of the line Hammer Time collectors set given...

Calculate the normal selling price for the top of the line Hammer Time collectors set given the following information.

Direct materials $37/unit

Direct labor $41/unit

Factory Overhead $262,000

Selling & Admin expenses $444,000

Total assets $2,000,000

Base it on 10,000 units

Desired rate of return 17%

The calculated sales price of the collectors set is?

		$121.91/unit
		$166.31/unit
		$173.86/unit
		$182.60/unit

business accounting

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Answer 1

Answer #1

Total Variable cost per unit

Direct Material = (37*10,000) = $370,000

Direct Labor = (41 *10,000) = $410,000

Fixed Overhead = $262,000

Selling & Admin expenses = $444,000

Total Cost = $1,486,000

Add: Desired Profit ($2,000,000 * 17%) = $340,000

Total sales = $1,826,000

Selling Price per unit = $1,826,000 / 10,000

Selling Price per unit = $182.60

Option 'D' is correct

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Answer 2

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