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Steeze Co. makes snowboards and uses the total cost approach in setting product prices. Its costs for producing 10,000 units follow. The company targets a profit of $300,000 on this product. 1. Compute the total cost per unit. 2. Compute the markup percentage on total cost. 3. Compute the product’s selling price using the total cost method. Variable Costs per Unit Direct materials $100 Direct labor . 25 Overhead 20 Selling . 5 Fixed Costs (in total) Overhead $470,000 Selling . 105,000 Administrative . 325,000 Exercise 25-

Steeze Co. makes snowboards and uses the total cost approach in setting product prices. Its costs for producing 10,000 units follow. The company targets a profit of $300,000 on this product. 1. Compute the total cost per unit. 2. Compute the markup percentage on total cost. 3. Compute the product’s selling price using the total cost method. Variable Costs per Unit Direct materials $100 Direct labor . 25 Overhead 20 Selling . 5 Fixed Costs (in total) Overhead $470,000 Selling . 105,000 Administrative . 325,000 Exercise 25-

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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Steeze Co. makes snowboards and uses the total cost approach in setting product prices. Its costs for producing
10,000 units follow. The company targets a profit of $300,000 on this product.
1. Compute the total cost per unit.
2. Compute the markup percentage on total cost.
3. Compute the product’s selling price using the total cost method.
Variable Costs per Unit
Direct materials $100
Direct labor . 25
Overhead 20
Selling . 5
Fixed Costs (in total)
Overhead $470,000
Selling . 105,000
Administrative . 325,000
Exercise 25-

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