Reference no: EM133123568

Question - Boscoe Ltd manufactures component parts. One product, DN25, has annual sales of 69,000 units. Bosco Ltd sells DN25 for $44.9 per unit. It has two direct cost categories (direct materials, direct manufacturing labour) and two activity-based categories (engineering and testing). All R&D and design costs are included in the engineering cost category. There are no marketing, distribution or customer-service costs. The cost driver for engineering is engineer-hours and the cost driver for testing is test-hours. Testing costs are variable costs. Engineering costs are fixed costs based on engineering capacity. Information on annual costs includes the following:

Direct materials: $14.3 per unit

Direct manufacturing labour: $14.3 per direct manufacturing labour-hour

Engineering: $17 per engineer-hour (based on capacity of 24,000 engineering-hours)

Testing: $14 per test-hour

Each unit of DN25 requires 0.4 direct manufacturing labour-hours to produce and 0.5 test-hours to test.

Required - Calculate the amount of the mark-up percentage on the full cost per unit of DN25.