1. The Falling Snow Company is considering production of a lighted world globe that the company would price at a markup of 0.25 above full cost. Management estimates that the variable cost of the globe will be $62 per unit and fixed costs per year will be $240,000.

Assuming sales of 1,200 units, what is the full cost of a globe with a 0.25 markup?

2. The Falling Snow Company is considering production of a lighted world globe that the company would price at a markup of 0.25 above full cost. Management estimates that the variable cost of the globe will be $60 per unit and fixed costs per year will be $240,000.

Assume that the quantity demanded at the price calculated in part a is only 600 units. What is the full cost of the globe with a 0.25 markup?