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Tata Corporation is in the process of setting a selling price for a new product it has just designed. The following data relate to this product for a budgeted volume of 60,000 units.
Per Unit Total
Direct materials $20
Direct labor 40
Variable manufacturing overhead 10
Fixed manufacturing overhead $1,800,000
Variable selling and administrative expenses 6
Fixed selling and administrative expenses $ 1,440,000
Instructions:
Question 1: Compute each of the following for the new product, and show all the workings: 1. Total variable cost per unit, total fixed cost per unit, and total cost per unit. 2. Desired profit per unit. 3. Target selling price.
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