P4. (cost-plus pricing) DD corporation produces air purifiers. The following per unit cost information is available: direct materials $10, direct labor $20, variable manufacturing overhead $25, variable selling and administrative expenses $15. Fixed selling and administrative expenses are $200,000, and fixed manufacturing overhead is $100,000.

Instructions:

1. Using a 40% markup percentage on the total cost per unit and assuming 10,000 units, compute the target selling price.

2. Using a 50% markup percentage on the total cost per unit and assuming 20,000 units, compute the target selling price.