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 $100. Given its experience, Leno believes the All-Body suit would have the following manufacturing costs.

	Direct materials		$27
	Direct labor		28
	Manufacturing overhead		45
	Total costs		$100

(a1)

Assume that Leno uses cost-plus pricing, setting the selling price 30% above its costs. What would be the price charged for the All-Body swimsuit?

2.

Schopp Corporation makes a mechanical stuffed alligator that sings the Martian national anthem. The following information is available for Schopp Corporation's anticipated annual volume of 483,000 units.

		Per Unit			Total
Direct materials		$ 6
Direct labor		$12
Variable manufacturing overhead		$14
Fixed manufacturing overhead					$2,898,000
Variable selling and administrative expenses		$15
Fixed selling and administrative expenses					$1,449,000

The company has a desired ROI of 25%. It has invested assets of $27,048,000.

a) Compute the total cost per unit.

b)Compute the desired ROI per unit.

c)Compute the markup percentage using total cost per unit.

d)Compute the target selling price.

3.

Second Chance Welding rebuilds spot welders for manufacturers. The following budgeted cost data for 2020 is available for Second Chance.

			Time Charges			Material Loading Charges
	Technicians' wages and benefits		$238,000				-
	Parts manager's salary and benefits		-				$39,700
	Office employee's salary and benefits		56,000				11,810
	Other overhead		14,000				20,400
	Total budgeted costs		$308,000				$71,910

The company desires a $34 profit margin per hour of labor and a 20.00% profit margin on parts. It has budgeted for 7,000 hours of repair time in the coming year, and estimates that the total invoice cost of parts and materials in 2020 will be $408,000.

a) Compute the rate charged per hour of labor.

b)Compute the material loading percentage. (Round answer to 3 decimal places, e.g. 10.501%.)

c)Pace Corporation has requested an estimate to rebuild its spot welder. Second Chance estimates that it would require 40 hours of labor and $2,400 of parts. Compute the total estimated bill. (Round answer to 2 decimal places, e.g. 10.50.)