Question
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
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 $100. Given its experience, Leno believes the All-Body suit would have the following manufacturing costs.
Direct materials | $30 | |||
---|---|---|---|---|
Direct labor | 35 | |||
Manufacturing overhead | 35 | |||
Total costs | $100 |
(a1)
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?
Selling price | $enter the selling price in dollars |
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