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Rios Company makes drones and uses the variable cost method in setting product price. Its costs for producing 20,000 units follow. The company targets
Rios Company makes drones and uses the variable cost method in setting product price. Its costs for producing 20,000 units follow. The company targets a profit of $300,000 on this product. Variable Costs per Unit Direct materials $70 Direct labor 40 Overhead 25 Selling, general and administrative 15 Fixed Costs (total) Overhead $670,000 Selling, general and administrative $590,000 Units produced 20,000 $300,000 Targeted profit Required: 1. Compute the total variable cost and the markup percentage. 2. Compute the dollar markup per unit on variable cost. 3. Compute the selling price per unit. 1. Total variable costs 1. Markup percentage $3,000,000 152% 2. Markup per unit $228 3. Selling price per unit $378
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