Variable Cost Concept of Product Pricing

Willis Products Inc. uses the product cost concept of applying the cost-plus approach to product pricing. The costs of producing and selling 7,000 units of medical tablets are as follows:

Variable costs per unit:					Fixed costs:
	Direct materials	$109				Factory overhead	$266,000
	Direct labor	40				Selling and admin. exp.	91,000
	Factory overhead	34
	Selling and admin. exp.	27
Total		$210

Willis Products desires a profit equal to a 25% rate of return on invested assets of $600,012.

a. Determine the variable costs and the cost amount per unit for the production and sale of 7,000 units of medical tablets.

Total variable costs	$
Variable cost per unit	$ per unit

b. Determine the variable cost markup percentage per unit. Round your percentage answer to one decimal place. %

c. Determine the selling price per unit. Use the rounded variable cost markup percentage in your calculations, and round the amount of the markup to the nearest whole dollar. $ per unit