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Quamma Corporation makes a product that has the following costs: Per Year Per Unit $16.30 $13.90 $ 1.20 Direct materials Direct labor Variable manufacturing overhead
Quamma Corporation makes a product that has the following costs: Per Year Per Unit $16.30 $13.90 $ 1.20 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses Fixed selling and administrative expenses $577,800 $ 2.90 $552,000 The company uses the absorption costing approach to cost-plus pricing as described in the text. The pricing calculations are based on budgeted production and sales of 27,000 units per year. The company has invested $520,000 in this product and expects a return on investment of 10%. Required: a. Compute the markup on absorption cost. (Round your intermediate and final answer to 2 decimal places.) b. Compute the selling price of the product using the absorption costing approach. (Round your intermediate and final answer to 2 decimal places.) a. Markup percentage on absorption cost b. Selling price
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