Exercise 23-15 Product pricing using variable costs LO P1 Rios Co. makes drones

Question

Exercise 23-15 Product pricing using variable costs LO P1

Rios Co. makes drones and uses the variable cost approach in setting product prices. Its costs for producing 26,000 units follow. The company targets a profit of $306,000 on this product.

1. Compute the variable cost per unit.
2. Compute the markup percentage on variable cost. (Round percentage answer to 2 decimal places.)
3. Compute the product’s selling price using the variable cost method.

Variable Costs per Unit Fixed Costs Direct materials $ 76 Overhead $ 676,000 Direct labor 46 Selling 311,000 Overhead 31 Administrative 291,000 Selling 21

Explanation / Answer

1.

2.

3.

Direct material $    76 Direct labor $    46 Overhead $    31 Selling $    21 Variable cost per unit $ 174

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

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