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Rios Co. makes drones and uses the variable cost approach in setting product prices. Its costs for producing 40,000 units follow. The company targets a
Rios Co. makes drones and uses the variable cost approach in setting product prices. Its costs for producing 40,000 units follow. The company targets a profit of $320,000 on this product. Variable costs per Unit Direct materials $ 90 Direct labor 60 Overhead 45 Selling 35 Fixed Costs (in total) Overhead $690,000 Selling 325,000 Administrative 305,000 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 2 Variable cost per unit Markup percentage Selling price % 3
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