Monroe Corporation manufactures Part No. 67, which is used in the production of mountain bikes.Per-unit information about Part No. 67 follows.

Prevailing market price

$33

Direct materials

14

Direct labor

6

Manufacturing overhead

7

Selling and administrative expenses

3

Monroe has traditionally used a 20% markup on the total cost to arrive at a reasonable selling price.The company, though, has noticed a sizable drop in sales volume during the last few quarters, which it attributes to new entrants in the marketplace.

REQUIRED:

A.Compute the current selling price of Part No. 67.

B If management desired to meet the prevailing market price and maintain the current rate of profit on sales, what must happen to the company's total manufacturing costs? By how much