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2. Boston Executive, Inc., produces executive limousines and currently manufactures the mini- bar inset at these costs: Variable Costs: Fixed Cost Amount: $500 Variable Cost
2. Boston Executive, Inc., produces executive limousines and currently manufactures the mini- bar inset at these costs: Variable Costs: Fixed Cost Amount: $500 Variable Cost Fixed Costs: Amount: $950 Depreciation - equipment 650 Depreciation - building 300 Supervisor salaries 1,900 Total Fixed costs Direct materials Direct labor Variable overhead Total variable costs 200 300 1,000 Assume that Boston Executive, Inc. uses the variable cost method of applying the cost-plus approach to product pricing. a. Determine the variable costs and the variable cost amount per unit for the production and sale of 1,000 mini-bars. b. Determine the variable cost markup percentage (rounded to two places behind the decimal) for mini-bars. c. Determine the selling price of mini-bars. (Round markup to the nearest cent.)
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