Question
Swifty Company makes swimsuits and sells these suits directly to retailers. Although Swifty has a variety of suits, it does not make the Performance suit
Swifty Company makes swimsuits and sells these suits directly to retailers. Although Swifty has a variety of suits, it does not make the Performance suit used by highly skilled swimmers. The market research department believes that a strong market exists for this type of suit. The department indicates that the Performance suit would sell for approximately $ 100. Given its experience, Swifty believes the Performance suit would have the following manufacturing costs.
Direct materials | $ 29 | |||
Direct labor | 28 | |||
Manufacturing overhead | 43 | |||
Total costs | $ 100 |
Assume that Swifty uses cost-plus pricing, setting the selling price 26% above its costs. What would be the price charged for the Performance swimsuit?
Selling price | $ enter the selling price in dollars |
eTextbook and Media
Assume that Swifty uses target costing. What is the price that Swifty would charge the retailer for the Performance swimsuit?
Selling price | $ enter the selling price in dollars |
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What is the highest acceptable manufacturing cost Swifty would be willing to incur to produce the Performance swimsuit, if it desired a profit of $ 26 per unit? (Assume target costing.)
Target cost | $ enter the target cost in dollars |
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