Exercise 8-3 Leno Company makes swimsuits and sells these suits direct y to reta

Question

Exercise 8-3 Leno Company makes swimsuits and sells these suits direct y to retailers. Although Leno has a variety o suits itdoes not make the A - od suit used by 1 skile ? swimmers T e are research department believes that a strong market exists for this type of suit. The department indicates that the All-Body suit would sell for approximately $112. Given its experience, Leno believes the All-Body suit would have the following manufacturing costs. Direct materials Direct labor Manufacturing overhead Total costs $26 32 50 $108 Assume hat Leno uses cost plus pricing, setting the selling price 25% above its costs. What would be the price charged for the All Body swimsuit? Round answer to 2 decimal laces, e g 10 5 ) Selling price Assume that Leno uses target costing. What is the price that Leno would charge the retailer for the All-Body swimsuit? Selling price s What is the highest acceptable manufacturing cost Leno would be willing to incur to produce the All-Body swimsuit, if it desired a profit of $27 per unit? (A target costing.) Target cost

Explanation / Answer

Answer 1

Answer 2

Under target costing, the selling price that Leno would charge for All-Body swinsuit will be $ 120 per unit

Answer 3

Direct Material 26 Direct Labour 32 Manufacturing Overhead 50 Total Cost Per Unit 108 Markup of 25% on Cost 27 Selling Price 135

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.