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Rios Co. makes drones and uses the variable cost approach in setting product prices. Its costs for producing 23,000 units follow. The company targets a profit of $303,000 on this product. Variable Costs per Unit Fixed Costs Direct materials 73 43 Direct labor Overhead Selling $ 28 18 Overhead Selling Administrative $ 673,000 308,000 288,000 1. Compute the variable cost per unit. 2. Compute the markup percentage on variable cost. 3. Compute the product's selling price using the variable cost method.

Rios Co. makes drones and uses the variable cost approach in setting product prices. Its costs for producing 23,000 units follow. The company targets a profit of $303,000 on this product. Variable Costs per Unit Fixed Costs Direct materials 73 43 Direct labor Overhead Selling $ 28 18 Overhead Selling Administrative $ 673,000 308,000 288,000 1. Compute the variable cost per unit. 2. Compute the markup percentage on variable cost. 3. Compute the product's selling price using the variable cost method.

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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Rios Co. makes drones and uses the variable cost approach in setting product prices. Its costs for producing 23,000 units follow. The company targets a profit of $303,000 on this product. Variable Costs per Unit Direct materials Direct labor Overhead Selling Fixed Costs $ 73 43 28 18 Overhead Selling Administrative $ 673,000 308,000 288,000 1. Compute the variable cost per unit. 2. Compute the markup percentage on variable cost. 3. Compute the product's selling price using the variable cost method.
Transcribed Image Text:Rios Co. makes drones and uses the variable cost approach in setting product prices. Its costs for producing 23,000 units follow. The company targets a profit of $303,000 on this product. Variable Costs per Unit Direct materials Direct labor Overhead Selling Fixed Costs $ 73 43 28 18 Overhead Selling Administrative $ 673,000 308,000 288,000 1. Compute the variable cost per unit. 2. Compute the markup percentage on variable cost. 3. Compute the product's selling price using the variable cost method.
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