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Galla Inc. needs to determine a price for a new product. Galla desires a 25% markup on the total cost of the product. Galla expects to sell 5,000 units. Additional information is as follows:
Variable product cost per unit$15
Variable administrative cost per unit 10
Total fixed overhead 45,000
Total fixed administrative 18,000
Question 1: Using the total cost method what price should Galla charge?
Multiple Choice
Option 1: $56
Option 2: $47
Option 3: $62
Option 4: $30
Option 5: $42
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