Question 1 47 $111 (a1) Open Show Work SHOW SOLUTION SHOW ANSWER LINK TO TEXT LI
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Question 1
47
$111
(a1)
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Question 1
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 $115. Given its experience, Leno believes the All-Body suit would have the following manufacturing costs.Direct materials $29 Direct labor 35 Manufacturing overhead
47
Total costs$111
(a1)
Your answer is correct. Assume that 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 places, e.g. 10.50.)Selling price $ Click if you would like to Show Work for this question:
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Attempts: 1 of 1 used(b)
Assume that Leno uses target costing. What is the price that Leno would charge the retailer for the All-Body swimsuit?Selling price $ Click if you would like to Show Work for this question:
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Assume that Leno uses cost-plus pricing, setting the selling price 25% above its costs. What would be the price charged for the All-Body swimsuit?
Particulars
Amount ($)
Direct Material
29
Direct Labour
35
Manufacturing Overheads
47
Total Costs
111
Add: 25% of 111 (i.e., 111*25%)
27.75
Selling Price
138.75
Assume that Leno uses target costing. What is the price that Leno would charge the retailer for the All-Body swimsuit?
Particulars
Amount ($)
Selling Price of All Body Suit
115
Less: Profit Margin (25% on Cost or 20% on Selling Price) (i.e., 115*20%)
23
Target Cost (115 - 23)
92
Assume that Leno uses cost-plus pricing, setting the selling price 25% above its costs. What would be the price charged for the All-Body swimsuit?
Particulars
Amount ($)
Direct Material
29
Direct Labour
35
Manufacturing Overheads
47
Total Costs
111
Add: 25% of 111 (i.e., 111*25%)
27.75
Selling Price
138.75
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