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Question 5 Krispy Chips Manufacturing Limited is located in Mount Salem, Montego Bay. The company currently makes two chips: banana and cassava. Currently, the company employs a cost-plus pricing strategy along with absorption costing. Management applies a selling expense of 20% to total cost, after which a margin of 30% is to be applied. Budgeted overhead for the period January 2015 was $7,500,000. For the same period, management budgeted direct labour hours and machine hours of 250,000 and 50,000 respectively. Additionally, the average direct labour hour rate is $ 12 per hour. Direct material can be bought at only $35 per kilogram for banana and $50 per kilogram for cassava. The production manager provided an analysis of information that occurred during January 2015 for each unit of the products: Direct material in kilogram Direct labour hours Machine hours Direct expenses Banana 2 3 1 $10 Cassava 1 3 1 $12 Required: (a) Determine selling price per unit using margin (b) Determine the profit on each unit using margin (c) Determine the cost per unit using margin (d) Assuming a mark-up of 30%, calculate the selling price per unit