1. Product Cost Concept of Product Pricing

La Mujer Accessories Inc. produces womens handbags. The cost of producing 1,190 handbags is as follows:

Direct materials	$16,400
Direct labor	8,300
Factory overhead	6,500
Total manufacturing cost	$31,200

The selling and administrative expenses are $27,200. The management wants a profit equal to 18% of invested assets of $496,000.

If required, round your answers to nearest whole number.

a. Determine the amount of desired profit from the production and sale of 1,190 handbags. $fill in the blank 1

b. Determine the product cost per unit for the production of 1,190 handbags. $fill in the blank 2per unit

c. Determine the product cost markup percentage for handbags. fill in the blank 3 %

d. Determine the selling price of handbags.

Cost	$fill in the blank 4	per unit
Markup	fill in the blank 5	per unit
Selling price	$fill in the blank 6	per unit

2. Toyota Motor Corporation uses target costing. Assume that Toyota marketing personnel estimate that the competitive selling price for the Camry in the upcoming model year will need to be $27,000. Assume further that the Camry's total unit cost for the upcoming model year is estimated to be $22,500 and that Toyota requires a 20% profit margin on selling price (which is equivalent to a 25% markup on total cost).

a. What price will Toyota establish for the Camry for the upcoming model year? $fill in the blank 1