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Rios Co. makes drones and uses the variable cost approach in setting product prices. Its costs for producing 25,000 units follow. The company targets a
Rios Co. makes drones and uses the variable cost approach in setting product prices. Its costs for producing 25,000 units follow. The company targets a profit of $305,000 on this product. Variable Costs per Unit Direct materials $ 75 Direct labor 45 Overhead 30 Selling 20 Fixed Costs (in total) Overhead $675,000 Selling 310,000 Administrative 290,000 1. Compute the variable cost per unit. 2. Compute the markup percentage on variable cost. (Round percentage answer to 2 decimal places.) 3. Compute the product's selling price using the variable cost method. (Round your intermediate percentage calculations and final answer to 2 decimal places.) 1. $ 170 2. Variable cost per unit Markup percentage Selling price % 3. $ 233.13
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