24-10

Product Cost Concept of Product Pricing

Mademoiselle Company produces women's handbags. The cost of producing 1,290 handbags is as follows:

Direct materials	$16,200
Direct labor	7,200
Factory overhead	6,200
Total manufacturing cost	$29,600

The selling and administrative expenses are $29,000. The management desires a profit equal to 15% of invested assets of $504,000.

If required, round your answers to nearest whole number.

a. Determine the amount of desired profit from the production and sale of 1,290 handbags. $

b. Determine the product cost per unit for the production of 1,290 handbags. $ per unit

c. Determine the product cost markup percentage for handbags. %

d. Determine the selling price of handbags. Round your answers to nearest whole value.

Cost	$ per unit
Markup	$ per unit
Selling price	$ per unit