Sirhuds Inc., a maker of smart watches, reports the information below on its product. The company uses absorption costing and has a target markup of 40% of absorption cost per unit. Compute the target selling price per unit under absorption costing.
Direct materials cost.........................................$ 100 per unit
Direct labor cost................................................$30 per unit
Variable overhead cost.........................................$8 per unit
Fixed overhead cost....................................$600,000 per year
Variable selling and administrative expenses...............$3 per unit
Fixed selling and administrative expenses.........$ 120,000 per year
Expected production (and sales).................50,000 units per year