Hansen Corporation needs to set a target price for its newly designed product EverReady. The following data relate to this new product.
The costs shown above are based on a budgeted volume of 81,900 units produced and sold each year. Hansen uses cost-plus pricing methods to set its target selling price. Because some managers prefer absorption-cost pricing and others prefer variable-cost pricing, the department provides information under both approaches using a markup of 53% on absorption cost and a markup of 75.14% on variable cost.
Per Unit Total Direct materials $22.00 Direct labor $36.00 Variable manufacturing overhead $13.00 Fixed manufacturing overhead $1,310,400 Variable selling and administrative expenses $5.00 Fixed selling and administrative expenses $1,181,817
I got 133.11 for using absorption-cost
and 57.12 for variable costing.I got it wrong. I did (22+36+13+5 which equals 76)+(75.14%*76)
Where did I go wrong? someone please help me!
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