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Lemke Company is producing and selling 150,000 units of Specialized Sunscreen are as follows: The costs and expenses follow: Variable costs: DM $14.00 DL 7.00

Lemke Company is producing and selling 150,000 units of Specialized Sunscreen are as follows: The costs and expenses follow:

Variable costs:

DM

$14.00

DL

7.00

FOH

3.00

Selling and administrative expenses

6.00

Total

$30.00

Fixed costs:

FOH

$90,000

Selling and administrative expenses

40,000

Lemke desires a profit equal to an 18% rate of return on invested assets of $2,880,000.

REQUIRED:

(1)Using Variable Cost Concept of applying the cost-plus approach to product pricing:

(a)

Determine the amount of desired profit from the production and sale of the Sunscreen

(b)

Determine the total variable costs for the production and sale of 150,000 units of the Sunscreen.

(c)

Determine the markup percentage for the Sunscreen.

(d)

Determine the unit selling price of the Sunscreen.

Round your markup percentage to one decimal place and other intermediate calculations and final answer to two decimal places.

(2)Using Total Cost Concept:

(a) Determine JUST the markup percentage for the Sunscreen. (Round your markup percentage to two decimal places).

(3)Using the Product Cost Concept,

(a) Determine JUST the markup percentage for the Sunscreen. (Round your markup percentage to two decimal places).

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