Problem Set #2 Problem #3: Pricing Decisions (8 points) 1. Page 8 of 17 JB Peach Products uses a cost-plus pricing formula to establish the prices for its products. For 2022, the Company is using the absorption cost of a product plus a 75% markup on the cost to establish the selling price of a product. a. Compute the Gross Profit % for a product that results from the pricing policy. Gross Profit % (2 points) Supporting Calculations Required: 2. Your Answers Here is cost data relating its newest product, the XP-12, a high-end, peach-scented health item: Units Produced 250,000 Direct Materials Cost per Unit $12.60 Direct Labor Cost per Unit $5.85 Variable Manufacturing OH Cost per Unit $3.95 Total Fixed Manufacturing OH Cost $1,900,000 Variable SG&A Expenses per Unit Fixed SG&A Expenses $2.10 $2,945,000 b. Compute the Absorption Cost per Unit of the XP-12. Absorption Cost per Unit of the XP-12 (4 points) Supporting Calculations Required: Your Answers Problem Set #2 Page 9 of 17 b. Use the pricing policy to compute Selling Price per Unit of the XP-12. Your Answers Selling Price per Unit of the XP-12 (2 points) Supporting Calculations Required: