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A company is planning to market a new product. The original cost and profit calculations are as follows: Factory overhead (based on 40% direct labor)
A company is planning to market a new product. The original cost and profit calculations are as follows: Factory overhead (based on 40% direct labor) $120 Gross profit ( 25% of sales) 220 Direct materials 240 Direct labor 300 Total cost 660 Selling price 880 When reviewing the final calculations, the controller found that direct labor should be 10% higher. Which of the following correctly calculates the selling price for the product? A. 1.25 xx(($420 xx1.1)+$240) B. quad1.25 xx(($300 xx1.1)+$240+$120) C. 1.33 xx(($420 xx1.1)+$240) D. quad1.33 xx(($300 xx1.1)+$240+$120)
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