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Leno Company makes swimsuits and sells these suits directly to retailers. Although Leno has a variety of suits, it does not make the All- Body suit used by highly skilled swimmers. The market research department believes that a strong market exists for this type of suit. The department indicates that the All-Body suit would sell for approximately $100. Given its experience, Leno believes the All-Body suit would have the following manufacturing costs. Direct materials Direct labor Manufacturing overhead Total costs Selling price $23 $ 32 45 Assume that Leno uses cost-plus pricing, setting the selling price 28% above its costs. What would be the price charged for the All- Body swimsuit? $100

Leno Company makes swimsuits and sells these suits directly to retailers. Although Leno has a variety of suits, it does not make the All- Body suit used by highly skilled swimmers. The market research department believes that a strong market exists for this type of suit. The department indicates that the All-Body suit would sell for approximately $100. Given its experience, Leno believes the All-Body suit would have the following manufacturing costs. Direct materials Direct labor Manufacturing overhead Total costs Selling price $23 $ 32 45 Assume that Leno uses cost-plus pricing, setting the selling price 28% above its costs. What would be the price charged for the All- Body swimsuit? $100

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Leno Company makes swimsuits and sells these suits directly to retailers. Although Leno has a variety of suits, it does not make the All- Body suit used by highly skilled swimmers. The market research department believes that a strong market exists for this type of suit. The department indicates that the All-Body suit would sell for approximately $100. Given its experience, Leno believes the All-Body suit would have the following manufacturing costs. Direct materials Direct labor Manufacturing overhead Total costs $23 Selling price: $ 32 45 $100 Assume that Leno uses cost-plus pricing, setting the selling price 28% above its costs. What would be the price charged for the All- Body swimsuit?
Transcribed Image Text:Leno Company makes swimsuits and sells these suits directly to retailers. Although Leno has a variety of suits, it does not make the All- Body suit used by highly skilled swimmers. The market research department believes that a strong market exists for this type of suit. The department indicates that the All-Body suit would sell for approximately $100. Given its experience, Leno believes the All-Body suit would have the following manufacturing costs. Direct materials Direct labor Manufacturing overhead Total costs $23 Selling price: $ 32 45 $100 Assume that Leno uses cost-plus pricing, setting the selling price 28% above its costs. What would be the price charged for the All- Body swimsuit?
Assume that Lerio uses target costing. What is the price that Leno would charge the retailer for the All-Body swimsuit? Selling price eTextbook and Media What is the highest acceptable manufacturing cost Leno would be willing to incur to produce the All-Body swimsuit, if it desired a profit of $29 per unit? (Assume target costing.) Target cost $ eTextbook and Medial !
Transcribed Image Text:Assume that Lerio uses target costing. What is the price that Leno would charge the retailer for the All-Body swimsuit? Selling price eTextbook and Media What is the highest acceptable manufacturing cost Leno would be willing to incur to produce the All-Body swimsuit, if it desired a profit of $29 per unit? (Assume target costing.) Target cost $ eTextbook and Medial !
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