Exercise 19-11 Absorption costing and product pricing LO P4

Sirhuds Inc., a maker of smartwatches, reports the information below on its product. The company uses absorption costing and has a target markup of 40% of absorption cost per unit.

Direct materials cost	$	106	per unit
Direct labor cost	$	36	per unit
Variable overhead cost	$	14	per unit
Fixed overhead cost	$	220,000	per year
Variable selling and administrative expenses	$	6	per unit
Fixed selling and administrative expenses	$	135,000	per year
Expected production (and sales)		44,000	units per year

Compute the target selling price per unit under absorption costing. (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

	Per unit
Direct materials
Direct labor
Variable overhead
Fixed overhead
Total product cost using absorption costing
Target profit
Target selling price