Chapter 25, Problem 28E

To determine

Total cost is the summation of all the costs such as fixed cost, variable cost.

Variable cost per unit is calculated by adding direct material, direct labor, overhead and selling cost per unit. The variable cost does not remain fixed with the change in level of activity. It changes with the change in the level of the activity.

Fixed cost remains fixed with the change in the level of activity. It remains constant in totality.

To determine:

In the given question, we have to compute following:

1. Total cost per unit

2. Mark up percentage on total cost

3. Product’s selling price using total cost method