Sunland Corporation needs to set a target price for its newly designed product, M14-M16. The following data relate to it: Direct materials Direct labour Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses Fixed selling and administrative expenses Per Unit $14 19 12 3 Total $4,060,000 2,610,000 These costs are based on a budgeted volume of 290,000 units produced and sold each year, Sunland uses cost-plus pricing to set its target selling price. The markup on the total unit cost is 20%.
Sunland Corporation needs to set a target price for its newly designed product, M14-M16. The following data relate to it: Direct materials Direct labour Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses Fixed selling and administrative expenses Per Unit $14 19 12 3 Total $4,060,000 2,610,000 These costs are based on a budgeted volume of 290,000 units produced and sold each year, Sunland uses cost-plus pricing to set its target selling price. The markup on the total unit cost is 20%.
Chapter1: Financial Statements And Business Decisions
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The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:Sunland Corporation needs to set a target price for its newly designed product, M14-M16. The following data relate to it:
Direct materials
Direct labour
Variable manufacturing overhead
Fixed manufacturing overhead
Variable selling and administrative expenses
Fixed selling and administrative expenses
Per Unit
$14
Target selling price $
19
12
3
Total
$4,060,000
2,610,000
These costs are based on a budgeted volume of 290,000 units produced and sold each year, Sunland uses cost-plus pricing to set its
target selling price. The markup on the total unit cost is 20%.
Calculate the target selling price for M14-M16. (Round answer to 2 decimal places, e.g. 15.25.)
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