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I provided a document with the questions that needed to be answered Leno Company makes swimsuits and sells these suits directly to retailers. Although Leno
I provided a document with the questions that needed to be answered
Leno Company makes swimsuits and sells these suits directly to retailers. Although Leno has a variety of suits, it does not make the All-Body suit 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 $110. Given its experience, Leno believes the All-Body suit would have the following manufacturing costs. Direct materials Direct labor Manufacturing overhead Total costs $24 33 50 $107 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? (Round answer to 2 decimal places, e.g. 10.50.) Selling price $ Assume that Leno uses target costing. What is the price that Leno would charge the retailer for the All-Body swimsuit? Selling price $ What is the highest acceptable manufacturing cost Leno would be willing to incur to produce the All-Body swimsuit, if it desired a profit of $24 per unit? (Assume target costing.) Target cost $Step by Step Solution
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