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Hansen Corporation needs to set a target price for its newly designed product EverReady. The following data relate to this new product.
Per Unit TotalDirect materials $16.00Direct labor $41.00Variable manufacturing overhead $13.00Fixed manufacturing overhead $1,265,600Variable selling and administrative expenses $4.00Fixed selling and administrative expenses $1,208,648
The costs shown above are based on a budgeted volume of 79,100 units produced and sold each year. Hansen uses cost-plus pricing methods to set its target selling price. Because some managers prefer absorption-cost pricing and others prefer variable-cost pricing, the department provides information under both approaches using a markup of 45% on absorption cost and a markup of 68.51% on variable cost.
The standard materials cost to produce one unit of Product M is 6 pounds of material at a standard price of $50 per pound. In manufacturing 8,000 units, 47,000 pounds of material were used at a cost of $51 per pound. Illustrate what is the total ..
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