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You are the manager in the production department of a shoe manufacturing company. The Company produces rubber shoes and it caters to 3 types of

You are the manager in the production department of a shoe manufacturing company. The Company produces rubber shoes and it caters to 3 types of market: students, working class and athletes. The company produce standard type of shoes for each market, Class C for students which is of average quality, Class B for working class which has higher quality than that of Class C and Class A for athletes which is of highest quality. Management policy is to set up selling price at 20% above cost for Class C, 50% above cost for Class B and 70% above cost for Class A. Management projected a total demand for the products as follows:

Class C 50,000units

Class B 30,000 units

Class A 20,000

The President ask you to prepare cost sheets for each of the class of products as a basis in setting the price.

Required:

  1. 1. Prepare cost sheets for each type of products. Calculate total cost and per unit cost for each type of product.
  2. 2. Determine the selling price for each type of product.

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