Question

Talia Corp. produces digital cameras. For each camera produced, direct materials are $20, direct labor is $16, variable manufacturing overhead is $12, fixed manufacturing overhead is $28, variable selling and administrative expenses are $10, and fixed selling and administrative expenses are $24. Compute the target selling price assuming a 40% markup on total per unit cost. Target selling price

Answer 1

Talia Corp.

Target Selling Price

= $154

Step-by-step explanation:

a) Data and Calculations:

Direct materials = $20

Direct labor = 16

Variable manufacturing overhead = 12

Fixed manufacturing overhead = 28

Variable selling & administrative expenses = 10

Fixed selling and administrative expenses = 24

Total cost $110

40% markup on total per unit cost = 44

Target Selling Price = $154

b) Talia bases its target selling price on the addition of 40% of the total cost to the total cost (including manufacturing costs, selling, and administrative expenses).