DETERMINING FINISHED UNIT COST The Runfast Sneaker Co. has just started business. It has been determined that three pro- cessing departments will be required. Department A will make the canvas upper section of the sneaker. Department B will attach the rubber sole to the upper portion. Department C will place the finishing touches on the sneakers. No additional direct materials are added in Department C. Direct materials are added at the beginning of each process in Departments A and B. Below is the information for the first month of operations: Units started in process Units received from previous department Units transferred to finished goods inventory Ending units in process (% of completion) DEPARTMENT A DEPARTMENT B DEPARTMENT C 89,000 70,000 64,000 60,000 70% 25% 60% .. 55 per unit $50,813 150% of direct labor cost Costs: Department A: Direct materials ... Direct labor Factory overhead Department B: Direct materials. Direct labor Factory overhead Department Direct labor Factory overhead .. $2 per unit $35,370 150% of direct labor cost $48,672 150% of direct labor cost RODUCT COSTING Required: If management wishes to have a gross profit of 20% of sales, what should be the target selling price of the sneakers completed during the first month of operation