Judith Chemical Company produces a variety of products. Traditionally, the company has established base pricing for its products as 200% of the full manufacturing cost. However, one productThingamabobshas no direct competition and is in such great demand that the company has been able to successfully sell it for $350 even though the pricing formula just described would suggest that it sell for less than that figure. Recognizing the success of Thingamabobs in the marketplace, the companys VP of Sales wants to promote it much more aggressively so that the company can phase out its less successful products in hopes of increasing overall company profits.

The companys existing cost system assigns its $600,000 in overhead to products using a single company-wide rate equal to 6 times direct labor costs. Unit prime costs (i.e., direct materials and direct labor) for Thingamabobs (which sells for $350) include $50 for direct materials and $8 for direct labor.

Using the existing cost system, what is the perceived (a) full product cost and (b) profitability per unit, given the current selling price of $350, for Thingamabobs?

Perceived full product cost per unit

Perceived profitability per unit