Determine the selling price of handbags

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Problem - Product cost concept of product pricing - Mademoiselle Company produces women's handbags. The cost of producing 1,200 handbags is as follows:

Direct materials $16,000

Direct labor 8,000

Factory overhead 6,000

Total manufacturing cost $30,000

The selling and administrative expenses are $28,000. The management desires a profit equal to 16% of invested assets of $500,000.

Required -

a. Determine the amount of desired profit from the production and sale of 1,200 handbags.

b. Determine the product cost per unit for the production of 1,200 handbags.

c. Determine the product cost markup percentage for handbags.

d. Determine the selling price of handbags.

Reference no: EM132687484

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