Product Cost Concept of Product Pricing

Willis Products Inc. uses the product cost concept of applying the cost-plus approach to product pricing. The costs of producing and selling 3,000 units of medical tablets are as follows:

Variable costs per unit:					Fixed costs:
	Direct materials	$114				Factory overhead	$120,000
	Direct labor	42				Selling and admin. exp.	39,000
	Factory overhead	35
	Selling and admin. exp.	29
Total		$220

Willis Products desires a profit equal to a 20% rate of return on invested assets of $252,000.

a. Determine the total manufacturing costs for the production and sale of 3,000 units.

	Total Manufacturing Costs
Variable	$
Fixed factory overhead
Total	$

Determine the cost amount per unit for the production and sale of 3,000 units. $ per unit

b. Determine the product cost markup percentage per unit. Round your percentage answer to one decimal place. %

c. Determine the selling price per unit. Use the rounded product cost markup percentage in your calculations, and round the amount of the markup to the nearest whole dollar. $ per unit