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Exercise 1 Nico Co. makes skateboards and uses the variable cost approach in setting product prices. Its costs for producing 10,000 units follow. The company
Exercise 1 Nico Co. makes skateboards and uses the variable cost approach in setting product prices. Its costs for producing 10,000 units follow. The company targets a profit of $100,000 on this product. Total Variable Costs Total Fixed Costs Direct Materials $500,000 Overhead $320,000 Direct Labor 150,000 Administrative 140,000 Overhead 15,000 Total selling costs are 200,000 (40% variable and 60% fixed) 1. Compute the variable cost per unit. (4 points) 2. Compute the markup percentage on variable cost. (3 points) 3. Compute the product's selling price using the variable cost method. (3 points)
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