More-Lights Company just began to produce a new halogen light, which required an investment of $500,000.The costs of producing and selling 10,000 units of the new product are estimated as follows:

Variable costs per units:

Direct Material$32

Direct Labor12

Factory overhead8

Selling/Admin9

Fixed costs:

Overhead$180,000

Sell/Admin120,000

The company is now discussing where to set the selling price for the light, using the product-cost concept.Owners and managers both agree that the new halogen light must earn a minimum of a 10% rate of return.

Required:Using the product cost concept determine (showing all of your work)

a) the product cost per unit

b) the markup percentage

c) the final selling price of the light