Estimate the per unit selling price of new line of clothing

Reference no: EM131505608

Question: You have been asked to estimate the per unit selling price of a new line of clothing. Pertinent data are as follows:

Direct labor rate: 15.00 per hour

Production material: $375 per 100 items

Factory overhead: 125% of direct labor

Packing costs: 75% of direct labor

Desired profit: 20% of total manufacturing cost

Past experience has shown that an 80% learning curve applies to the labor required for producing these items. The time to complete the first item has been estimated to be 1.76 hours. Use the estimated time to complete the 50th item as your standard time for the purpose of estimating the unit selling price.

Reference no: EM131505608

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