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The following data relate to LawnMate Corporation's top-of-the-line lawnmower. Variable manufacturing cost $ 550 Applied fixed manufacturing cost 110 Variable selling and administrative cost 132
The following data relate to LawnMate Corporation's top-of-the-line lawnmower.
Variable manufacturing cost
$
550
Applied fixed manufacturing cost
110
Variable selling and administrative cost
132
Allocated fixed selling and administrative cost
?
To achieve a target price of $990 per lawnmower, the markup percentage is 12.5 per cent on total unit cost.
Required:
- What is the fixed selling and administrative cost allocated to each unit of LawnMate's top-of-the-line mower?
- For each of the following cost bases, develop a cost-plus pricing formula that will result in a target price of $990 per mower:
- (a)variable manufacturing cost
- (b)absorption manufacturing cost
- (c)total variable cost.
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