(b) Assume that Leno uses target costing. What is the price that Leno would charge the

retailer for the All-Body swimsuit?

(c) What is the highest acceptable manufncturing cost Leno would be willing to incur 10

produce the All-Body swimsuit, if it desired a profit of $25 per unit? (Assume target

costing.)

Leno Company makes swimsuits and sells these suits directly to retailers. Although Leno has a variety of suits, it does not make the All- Bodysuit used by highly skilled swimmers. The market research department believes that a strong market exists for this type of suit The department indicates that the All-Body suit would sell for approximately $100 Given its experience, Leno believes the All-Body suit would have the following manufacturing costs. $27 Direct materials Direct labor Manufacturing overhead 29 44 Total costs $100 Assume that Leno uses cost-plus pricing, setting the selling price 23% above its costs. What would be the price charged for the All- Body swimsuit? Selling price $