Exercise M-3 (Part Level Submission) 50 $113 (a1) Open Show Work Exercise M-3 (P

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Exercise M-3 (Part Level Submission)

50

$113

(a1)

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Exercise M-3 (Part Level Submission)

Leno Company makes swimsuits and sells these suits directly to retailers. Although Leno has a variety of suits, it does not make the All-Body suit used by highly skilled swimmers. The market 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 $114. Given its experience, Leno believes the All-Body suit would have the following manufacturing costs.
Direct materials $30 Direct labor 33 Manufacturing overhead

50

Total costs

$113

(a1)

Assume that Leno uses cost-plus pricing, setting the selling price 29% above its costs. What would be the price charged for the All-Body swimsuit? (Round answer to 2 decimal places, e.g. 10.50.)
Selling price $

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Explanation / Answer

Particulars Amt Material Cost          30.00 Direct Labor          33.00 Manufacturing Overhead          50.00 Total Cost       113.00 Add: Markup (113 x 29%)          32.77 Selling Price       145.77

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